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Ford Takes the Long View on Russia Investments
Ford Motor Co. says it remains confident about the future of Russia’s car market and is eager to invest ahead of the next upturn there.
“We see Russia as a long-term play,” Mark Ovenden, CEO of the company’s venture with Sollers OJSC tells Bloomberg News.
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Ford Motor Co. says it remains confident about the future of Russia’s car market and is eager to invest ahead of the next upturn there.
“We see Russia as a long-term play,” Mark Ovenden, CEO of the company’s venture with Sollers OJSC tells Bloomberg News. Russia was expected to become Europe’s largest car market by now. But slumping oil prices, foreign sanctions and a weak economy caused vehicle sales there to plummet 36% to 1.60 million units in 2015.
Ford’s sales in Russia last year plummeted 41% to 38,600 units. But they jumped 93% to 9,700 units in the first quarter of 2016 in a market that shrank 17%, according to the Moscow-based Assn. of European Businesses. Ford produces the EcoSport, Explorer and Kuga SUVs; Fiesta, Focus and Mondeo cars; and Transit van in Russia.
Ovenden doesn’t expect Ford sales to maintain their first-quarter pace. Even if they do, volume would fall well below the venture’s annual capacity to make 350,000 vehicle at Ford’s assembly plant near St. Petersburg and the Sollers factory in the Republic of Tatarstan.
Still, Ovenden says Ford is studying a new round of investments in the country. Last December he said Ford Sollers planned to test the eastern European market as a possible outlet for the venture’s underutilized capacity.
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