Russian automotive industry is experiencing overcapacity

Russian automotive industry is experiencing overcapacity

TASS. – According to the the Ministry of Industry and Commerce, the Russian automotive industry is capable of manufacturing 3.5 million vehicles per year. The figure takes the shrinkage in production numbers observed since 2014 into account. However, a sustainable development of the industry is ensured even when the factories operate with 50% capacity, as told by the Russian Deputy Minister of Industry and Commerce Alexander Morozov at a forum.

“We have created a large amount of production capacity during the second stage of the localisation of automotive industry. Currently, we have an excess capacity of 3.5 million automobiles per year. However, we had negative dynamics in the usage of capacities during the 2014-2016 period, as a result of the circumstances in the Russian economy. As of today, we can say that even 50% fulfillment of the total capacity will be sufficient to increase the efficiency in the industry” – said Morozov.

The deputy head of the department has also noted that the existing production capacities of Russian automotive industry are competitive both in terms of production quality and internal logistics.