Common Economic Space RussiaEU Success Stories and Obstacles

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Common Economic Space RussiaEU Success Stories and Obstacles

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Title: Common Economic Space RussiaEU Success Stories and Obstacles

1
Common Economic Space Russia-EUSuccess Stories
and Obstacles

Henrik Nenzen
-Chairman Automobile Manufacturers Committee ,AEB
-President Ford Motor Company ZAO

2
Automobile Manufacturers Committee

33 Global Cars and Commercial Brands
Support the development and growth of the
Automotive Sector in Russia
Support fair business rules

____ Other
Cadillac Jeep
Chevrolet Lexus
Chrysler Mazda
Dodge Mitsubishi
Ford Nissan
Honda Subaru
Hummer Toyota
Infiniti

European Brands
Alfa Romeo Opel
Audi Peugeot
BMW Porsche
Citroen Renault
Fiat Saab
Jaguar Skoda
Lancia Volvo
Land Rover VW
Maybach MINI
Mercedes-Benz

3
Automobile Manufacturers Committee

Monthly meetings- Board of Directors
8 Working groups
Automotive Regulations/Homologation
Customs
Statistics
Used Vehicles
Fuel Quality
Marketing/Exhibitions
Customer Legislation
Public Affairs

4
Automotive Industry Success Stories

Industry sales growth
Dealer network development
- Sales/ service/ parts/ retail finance
Investments in manufacturing plants
- 7 in operation
- 6 planned
Vehicle Homologation Harmonization EU-Russia.
Potential Future Successes
WTO
Establishment of a effective used vehicle sector
Clean emissions/ Fuel Quality and Vehicle Safety

5
Strong Growth 2000-2006
1,750,000
59
1,100,000
49
1830
4
- Non-Russian Brands
6
Growth Factors

Low ownership rates
Disposable Income up
Retail finance break through
Total Equation low price ? Total Value
Business Environment
Stable political situation
Property / land ownership rights
Green channel introduction
Personal Income and Company Taxation

7
Dealer Network Development

Ford Example
November of Dealers - 2000 17
2006
134
Employees - 2000
510
2006
13.400
Training- 7.340 Student days in 2006.
Latest Global Standards Transfer EU-Russia
- Customer Care processes and standards
- Technical
- IT
- Sales
- Financial
- Employer retention/ motivation
- Buildings and Equipment

8
Tumen

Sales Volume 1540 units
2.7 mils

9
Moscow

Sales Volume 3303
11.0 mils

10
Saint Petersburg

Sales Volume 3422
3.5 mils

11
Perm

Sales Volume 1389
3.5 mils

12
Nizhny Novgorod

Sales Volume 417
4.2 mils

13
Omsk

Sales Volume 458
4.5 mils

14
Samara

Sales Volume1599
2.2 mils

15
Stavropol

Sales Volume 1439
4.5 mils

16
Pyatigorsk

Sales Volume 400
1.8 mils

17
Neftekamsk

Sales Volume 320
1.6 mils

18
Almetievsk

Sales Volume 250
1.5 mils

19
Foreign Direct Investments

6 Manufacturing Plants within 3 years.
Decrees 166/566 excellent support with double
effect also
for development of auto components
manufacturers.
- Better opportunity for Russian Manufactures due
to components supply
improvement
Sales of locally produced foreign brands.

20
A New Potential Industry
21
A New Potential Industry
Used Vehicles Trading trough Official Dealers
New VAT regulations required allow dealers to
sell Trade-Ins without VAT (European
practice) Advantages
22
AEB Fuel Quality Improvement Plan

AEB agreement with 1 or 2 oil companies
The oil company guarantees fuel quality at
filling stations
AEB members recommend all customers to use fuel
only from selected partner (s)
Independent organization checks fuel quality
levels

23
Ford in Russia
24
Ford Growth in Russia
25
Ford Growth in Russia

2000
2006
Turnover 17 mils
2.0 bils
Parts Sales 4 mils
66 mils
Number of dealers 17
154
Ford Ranking 12
1 projected

Focus ?1 Nameplate (foreign brands)
3.5 years
Fusion ?1 Small car in 2006
Transit ?1 Among medium commercial
vehicles

26
Ford Investments in Russia
27
Ford Investments in Russia
28
Ford Investments in Russia
29
Ford Training Centre/ Office Plans
Opening Spring 2007
30
Russia - One of Top Three Automobile Growth
Markets in the World