Ford Sales Up 93 Percent in Russia in Q1 Despite 17 Percent Industry Downturn
Amidst Ford’s sales among the traditional 50 European markets rising 8.4% in the first quarter of 2016 were impressive numbers in Russia, a country whose automotive industry has been in a relative state of collapse. Despite a 17% Q1 sales decline for the entire industry, Ford’s sales were up 93% through March, which has triggered some discussion about Ford reinvesting in Russia in the future.
“We will continue to invest, and we are thinking now about what our next investment cycle in Russia will be,” Mark Ovenden, CEO of Ford Sollers told Automotive News. “We see Russia as a long-term play.”
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Ford has invested $1.5 billion into infrastructure in Russia since 2011, but a massive recession led to a near-40% drop in passenger car sales in 2015. In that same time, Ford began building its Focus, Mondeo, Fiesta, Transit, and Explorer in Russia, and it opened a new engine plant in Elabuga, Tatarstan. Ford also began production of the EcoSport at the Naberezhnye Chelny Assembly Plant in Tatarstan in late 2014. Ovenden says that Ford’s commitment to domestic manufacturing is “starting to pay dividends,” reflected in its Q1 growth.
Ford is realistic about its prospects in Russia, anticipating another 5% decline in the market per figures from the Association of European Businesses in Moscow. Ovenden said that part of Ford’s plans moving forward may involve exporting Russian-built vehicles to capitalize on the weakness of the ruble and “the shortage of capacity in western Europe.”
News Source: Automotive News (subscription required)