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. Last Updated: 07/27/2016

Russia Rolls Out Best Wheels at Motor Show

For MTRussia's largest carmaker, AvtoVAZ, is planning to go into full production with its Lada Priora model next year.
The ninth Moscow International Motor Show opened on Wednesday, with Russia's ailing auto industry putting on a brave face as foreign competitors make new inroads into the domestic market.

With no new models from Lada, the season's biggest Russian launch is UAZ's off-road Patriot. In a sign of the times, automakers Severstal-Avto and Izh-Avto are wheeling out South Korean cars made under license -- SsangYong's all-terrain Rexton and KIA's Spectra sedan, respectively.

The cars on display at the five-day show are a reflection of the country's booming auto market, which has recently opened up to foreign competitors in the hope that they will resuscitate -- rather than suffocate -- the domestic industry.

At Wednesday's opening ceremony, Deputy Industry and Energy Minister Andrei Reus said the domestic car market would grow to $31 billion by 2010, up 72 percent from $18 billion last year, RIA-Novosti reported.

International competitors are gobbling up an ever-greater portion of sales, however. Last year, 80,000 new foreign cars were sold, nearly twice the amount in 2003. In the first quarter of this year, domestic carmakers saw a 14 percent drop in demand, according to Reus' ministry.

Although exhibitors from 30 countries are present at the show at the Expocenter on Krasnopresnenskaya Naberezhnaya, many big-name global players are staying away. That leaves space for exotic foreign brands like Iran Khodro and China's Great Wall to show their wares.

Nevertheless, domestic manufacturers dominated the show.

Despite its name, the UAZ Patriot appears less Russian than its local rivals, with 20 percent foreign components, including a Korean chassis and Iranian dashboard.

The SUV, which costs about $15,000, has been on sale since mid-August and is intended to compete with the Chevy Niva, said Anton Karpov, UAZ marketing director.

Great Wall, which makes a $12,000 SUV, is also a future competitor, Karpov said, though he insisted the rivalry had not inspired the car's name. Instead, he said, it was linked to the appearance of Russians who have lost interest in foreign vacations and want to explore their own country.

UAZ hopes to sell 5,000 by the end of the year, with 15,000 the target next year, he said.


Yevgeny Filonov / For MT

Severstal-Avto has recently started assembling SsangYong's Rexton SUV.

UAZ's parent company, Severstal-Avto, is also targeting wealthier customers with the licensed production of SsangYong's Rexton, which will go on sale next month starting at $36,000. For the moment, the company is cautiously aiming for sales of 400 to 500 this year, said Severstal product manager Marat Sharapov.

Rival carmaker Izh-Avto has likewise discovered foreign cars. By the end of the year, the company plans to 8,000 KIA Spectras, which went into full production this week, said spokeswoman Inna Lebykina.

So far, only the paint and batteries are manufactured in Russia, she said. But in six months, the company will start localization of parts in line with new government regulations designed to open the market to foreigners.

Auto giant AvtoVAZ is not unveiling any new Lada models this year. At the motor show, it is presenting its Lada Priora sedan, due to go into production in 2006, and the Kalina, which is already on sale.

The company is planning two new models to roll off assembly lines after 2009, said Vladimir Kadannikov, chairman of the board of directors of AvtoVAZ, Interfax reported Wednesday.

He also said that the GM-AvtoVAZ joint venture would roll back production of its Chevrolet Viva model from 7,500 to 3,000 this year due to a drop in demand.

For foreign automakers like Iran Khodro, that is good news. The Middle East's largest carmaker, which is making its debut at the motor show, plans to start selling its licensed Peugeots in September at a discount of 25 percent on the French originals, said Mikhail Yudin, commercial director of the car's Russian distributor, Avtodrug.

Iran Khodro's own Samand model will follow in November, said Yudin, who said the car's Iranian pedigree was unlikely to put off Russian consumers.

"I wouldn't say it's a minus," he said. "It will require a specific marketing campaign in association with the Iranian Embassy to show that Iran is a developed country, an industrial country."

The company is working with five dealers in Moscow and hopes to sell 1,000 cars this year and 3,000 in 2006, he said.

The Moscow International Motor Show runs through Sunday from 10 a.m. to 6 p.m. Tickets cost 200 rubles. Cars will be available for test drives on Saturday and Sunday. The show is being held at the Expocenter, 14 Krasnopresnenskaya Naberezhnaya, metro Krasnopresnenskaya.