Moscow Renault factory is suspending production

Moscow Renault factory is suspending production

Vedomosti – Moscow based Renault Russia car factory has decided to suspend the production due to falling demand, between 16 February – 6 March.

194,531 Renault automobiles have been sold in Russia in 2014 (-7%). According to AEB data, the sales of the brand has declined by 32% in January 2015. As one may remember, the overall market has shrunk by 24.4% in January.

Renault Russia factory, which has an annual production capacity of 188,000 automobiles, has manufactured 150,700 Renault (Duster, old Logan, Sandero etc.) and 10,833 Nissan Terrano in 2014, according to ASM Holding data. Tolyatti AVTOVAZ factory has also manufactured 58,740 automobiles from new Logan, Sandero and Sandero Stepway models, for Renault.

Renault dealers, interviewed by Vedomosti, relate the decline in the sales of the brand to the serious price increase (26% according to PwC) and the strengthening of the positions of the Korean brands. As a comparison: Hyundai has increased sales by 15% in January, despite pulling the prices up by 7% since September. KIA, whose prices rose by 14%, has also achieved to increase sales by 1% in January.

VTB Kapital analyst Vladimir Bespalov is sure that all factories in Russia will reduce production this year. According to Bespalov, it’s impossible to utilise the total production capacity of 3 million automobiles in full, in a market with an expected shrinkage rate of 35% (PwC prediction).