Automotive Report in Russia: Opportunities in a market in decline

Despite the deceleration, the automotive represents one of the main industrial sectors of the Russian Federation.

According to the report prepared by Basque trade & Investment, the vehicle market in Russia is stagnant. In 2019, production decreased a 2,5%, standing in 1.3 million units, with an internal market that remains below 2 million. This Negative trend has been aggravated by the closure of foreign manufacturers plants and the cancellation of new projectsmainly due to uncertainty around Special Investment Contracts (SPIC), a key tool for International investors. The Covid-19 pandemic has also strongly impacted the sector, deepening the investment withdrawal.

Despite the government impulse for strengthening the location of production, Component imports continue to be highespecially in segments such as transmissions, management and suspension systems, rubber-metal parts and electrical components. Japan, Germany, South Korea and China lead exports of these products to the Russian market. Spain maintains a stable positionwith an outstanding participation in games such as rubber-metal elements, axes, wheels and other mechanical parts.

Main manufacturers and international suppliers in Russian automotive

Manufacturers such as Renault, Volkswagen or Toyota have led the growth of assembly in Russia.

At the time of preparing the report, they operated in Russia more than 60 assembly and component production plantsowned by manufacturers such as Avtovaz, Gaz, Kamaz, Uaz, Sollers, Ford, Hyundai, Toyota, Renault O Volkswagen. Nevertheless, Several projects have been canceled or interruptedreflection of the context of uncertainty that the country is going through.

In addition, the report The presence of large international suppliers stands outamong which are Bosch, Faurecia, Magna, Michelin, Benteler, Bridgestone, Dense, Continental or Gestamp. These companies operate both through their own and Joint Ventures factories with Russian companies, supplying national and multinational manufacturers.

Import components and technological dependence of automotive in Russia

Despite the impulse to the location, imports of automotive parts remain high.

Although Russia promotes local production, its industry remains dependent on foreign suppliers in numerous strategic items. Component imports remain keyin particular in areas where Russian manufacturers do not have sufficient capacity to meet the demand for quality or volume. Spain, Germany, Japan and South Korea are among the main export countries to the Russian market.

Business opportunities for foreign companies in the Russian automotive sector

The Russian market demands efficient industrial solutions and components of high technological value.

Despite the structural difficulties of the Russian market, the Basque Trade & Investment report identifies specific opportunities for international companies that can offer high value added solutions. Market needs include Technologically advanced components, more efficient industrial processes, systems related to sustainable mobility and complex parts that require specialized manufacturing technologies.

The Russian context also demands Advanced coatings, solutions in light materials, embedded electronics and technologies related to connectivity and safetywhere Basque companies can stand out for their capacity for innovation. In this environment, Signatures that provide efficiency, technology and reliability can find collaboration routes with local or international manufacturers already implemented in the country.

Technology, Specialization and Resilience: Keys to operate in the Russian automotive market

Despite the Structural deceleration who lives the automotive sector in Russia, continue to exist specific opportunities For Basque companies capable of offering Advanced technological solutions, efficient processes and components of high added value. The new Basque Trade & Investment report analyzes these possibilities in depth and offers a realistic road map to address a complex market, but still relevant in certain industrial areas.

Russia maintains one high import dependence in strategic components such as transmissions, direction, rubber-metal parts and electrical systems, where Basque companies with specialized solutions They can provide differential value. There is also a demand for technologies linked to connectivity, safety, sustainable mobility or light materialsin which Euskadi has a solid competitive position.

However, it is key to take into account The current geopolitical contextcon Restrictions in force that condition commercial relations with Russia. Therefore, the report also raises Recommendations for minimizing risks and focus the business strategy towards the innovation, resilience and technical cooperation.

This analysis is complemented by sectoral studies on Global trends observed at fairs such as CES, Auto Shanghai, Auto Expo or Automotive Worldwhich allow Identify which technologies will have greater projection in markets such as Russian.

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