Slumping Sales Keep BMW’s Russian Plant on Ice

ST. PETERSBURG – BMW puts plans to develop its own manufacturing facility in Russia on hold and instead will maintain its relationship with contract assembler Avtovor.

“The company decided to suspend implementation of building its plant in Russia,” says Elena Smirnova, head of BMW Russia. “Taking into account the current situation in the Russian market, this means that the decision can be positive or negative.

“BMW follows the market trends in its policy, which means (lowering) production in the case of decline of the market.”

Russia vehicle sales totaled 139,456 units in April, down 41.4% from like-2014, WardsAuto data shows. The 540,425 deliveries through April was down 37.4% from the prior year. BMW sales, including the automaker’s Mini brand, fell 37.7% last month and were off 19.9% year-to-date at 10,726. The German luxury automaker is targeting 15,000 to 20,000 sales full-year.

According to Avtotor,  BMW still is interested in developing a plant within a larger automotive cluster with annual capacity of 250,000 units by 2019 in the Kaliningrad region.

Avtotor builds 3-, 5- and 7-Series BMW cars, as well as X1, X3, X5 and X6 CUVs and SUVs, from semi-knocked-down kits in Russia. Industry analyst ASM-Holding statistics show Avtotor assembled 24,843 BMW vehicles last year, down 17.7% from 2013.