Apr 10 2015

Japanese car maker Toyota confirmed last week that it plans to double the production capacity of its plant in St. Peters burg from the current 50,000 to 100,000 cars per year. The news is a rare positive for the auto industry in Russia, which has been hard-hit by the economic crisis. Recently as 2013, Russia was projected to become one of Europe’s leading car markets. However, the devaluation of the ruble sharply reduced demand for cars among Russian consumers. Car sales declined more than 24 percent in January alone and analysts from Avtostat, which tracks the industry, is predicting a 40 percent decrease in sales this year.the company rose from eighth to sixth in the ranking of brands purchased by Russians in January. Although the company’s overall sales decreased by 14 percent, according to data from the Association of European Businesses, sales of the company’s flagship Camry model are on the rise. Last year, sales of the car increased by 3.7 percent. Among Russians demand for Toyota are growing. Last year, Toyota opened a body parts pressing facility and a plastic parts production line, raising the level of localization of Camry production to 30 percent.Azat Timerkhanov, an analyst with Avostat , said that while increased localization is a positive move, it isn’t a silver bullet and "Localization can help to increase market share, but at the same time the localization level must be high in order to be less dependent on the exchange rate. The prices of foreign cars imported to the Russian Federation or the ones that are assembled in the country, but with a low level of localization of components, increase the most.”