Russian car factories may reduce the number of models due to SPIC

Russian car factories may reduce the number of models due to SPIC

Autostat – Russian car factories may reduce the number of models. The Ministry of Industry and Commerce predicts a reduction in the number of new vehicle models of all types, following the shift of car manufacturers to Special Investment Contracts (SPIC) in 2018-2020.

“Obviously, there will be a decrease in the production levels of the brands, which operate in the market today. This is an objective outcome. The Russian car factories, who produce 100,000 vehicles currently, will be interested in increasing their investments, during the SPIC period. On the other hand, SPIC will not be profitable for those who manufacture 15-20,000 vehicles per year currently, under the SKD assembly regime. Almost quadrupling the production volume will not be possible. The brands will give up SKD assembly, switching to direct imports, however, the production sites will certainly not become idle” – said the minister of industry of commerce Denis Manturov, as quoted by RNS.

The terms of most of the industrial assembly agreements with Russian car factories will run out in 2018-2019. Some of the agreements will be valid until 2020, as stated by the ministry spokesman.

As explained by the ministry representative, the SPIC will give 9 options to the investors. The production conditions for engines, transmissions, control systems, driver assistance systems, hybrid drives, battery cells and their control systems, power-wheels and speed-reducing gears are amongst the options.

“The automotive industry market is currently saturated with 90% Russian production. Deepening of localisation, increasing the competition and added value and minimum 20% production for exports are the tasks lying ahead of us” – said Manturov.

As made clear by the minister, the current calculation method of localisation level by taking the average figure of all cars manufactured by a car factory will change following the implementation of SPIC, taking into account all models assembled in Russia.