Audi Russia’s sales for the first eight months of 2015 totaled 16,359 cars, down 29.4% year-on-year, WardsAuto data shows. Deliveries by rival luxury automakers BMW and Mercedes-Benz fell 21.1% and 8.6%, respectively, in the period.
GM estimates the overall cost of closing its Russian business at $600 million, with a significant portion earmarked for reimbursing former dealers for their investments. But some dealers have filed lawsuits claiming the compensation is inadequate.
“We have great respect for Daimler and we hope that it will build its plant in the territory of St. Petersburg,” city official Maxim Meyskin says. “However, the project should not be implemented at any price, which is our fundamental position.”
Although imports comprise about 20% of the Russian market, Minister of Industry and Trade Denis Manturov believes global automakers have chosen to focus on local output as the country’s economic crisis, aggravated by Western sanctions, continues.
Despite GM’s shutdown of Chevrolet and Opel assembly and sales operations in Russia, and limiting its imports to Cadillac and a handful of Chevy products, the Niva is one of the country’s best-selling CUVs.
The automaker is cutting prices and expanding its product range in an effort to pull out of a tailspin that saw July sales drop 21.3% from like-2014 and 52% for the year’s first seven months, according to WardsAuto data.
Sources say Daimler has asked St. Petersburg Gov. Georgy Poltavchenko to provide a 125-acre site for the Mercedes-Benz assembly plant, along with associated infrastructure investment, without compensation from the automaker.
Despite the current difficulties, negotiations are expected to continue. Legal action by the dealers likely would result in the termination of service contracts by GM, potentially exposing bigger retailers with large customer bases to further losses.
Most of the new funding will be used to compensate local and global automakers for discounts given dealers in a market where, according to WardsAuto data, sales fell 29.7% year-on-year in June and were off 36.4% through the first half of the year.
The decision by Faurecia, which manufactures components such as seats, interiors and exhaust systems, to partially suspend operations may disrupt Russian production by major automakers including PSA Peugeot Citroen and Ford.
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