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Car giants prepare 'local' plants for sales assaults

More than 90% of the Russian car market is shared by domestic producers and the biggest, AvtoVaz (which builds Ladas), has a 76% share. In the first six months of this year, AvtoVaz produced nearly 376,000 cars, 30,000 more than in the corresponding period of last year.

Most new Russian cars sell for around £3,500 to £4,000. The Renault Clio Symbol sells for about £6,100 while the Ford Focus is around £9,250. Breaking down the domestic stranglehold is seen as the key to success in Russia. Henrik Nenzen, president of Ford Russia, said: “While we don't see sales increasing dramatically in the short term, we see Russian car buyers moving away from domestic makes.” Ford is predicting Russia's new car market will return to 1.2m this year (higher than the pre-1998 crisis year figures) and up to 1.6m by 2008. Last year sales of imported cars totalled 46,000 and are expected to reach 80,000 this year. Renault plans to start producing the Clio Symbol in Moscow from 2003. It will be assembled from kits shipped from Renault's plant in Turkey. The manufacturer has a joint venture with Moscow city government called Avtoframos. Renault has been given land and buildings that once belonged to the Moskvich car plant in return for installing modern assembly facilities. Ford will start pilot production of the Focus at its new plant in St Petersburg from the end of this year. The plant has an assembly capacity of 25,000 a year. GM will start building the Niva 4x4 next September at its joint venture plant with AvtoVaz in Togliatte. It will be sold as a Chevrolet Niva in Russia and 60% of the annual 75,000 production will be exported, but not as a 'Chevy'.

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