FOREIGN AUTOMAKERS TAP RUSSIAN AUTO BOOM
By Kim Iskyan
French auto giant Renault-Nissan will control a majority stake in Russian automaker AvtoVAZ by 2014, under a deal signed in early May.
Russian automakers open door to foreign investors
Photo Credit: DIKIIY / Shutterstock.com
The Russian auto industry is booming, and foreign automakers, including Volkswagen, Ford and Mazda, are trying to get a piece of the action through partnerships with domestic automakers. In order to receive tax incentives, ventures with foreign participants must use 60% local content and meet a base rate of yearly vehicle production.
Russian state oil company Rosneft signed landmark deals with ExxonMobil and Italy’s Eni in April to explore Russia’s Arctic reserves. The agreements follow recent government approval of tax breaks for investment in rich offshore fields.
Vladimir Putin was sworn into office on May 7 for a third presidential term, as protégé Dmitry Medvedev assumed the office of prime minister. The ceremony was preceded by violence a day earlier at a long-planned opposition rally with larger-than-anticipated crowds.
Russia’s economics ministry cut its GDP growth forecast for 2012 from 3.7% to 3.4%, despite growth of 4.0% in the first quarter of the year.