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I. Introduction
     The local automotive companies produced majority of Russian cars and a
     good lot of medium and heavy trucks in the Soviet Union, and then in the
     Russian Federation. Majority of local automotive corporations in the Soviet
     Union, followed by Russia, were located in the Volga valley. For the last 40
     years the automotive profile of the region has been defined by LADA cars
     (produced at AVTOVAZ – Samara region, Middle Volga); UAZ sports utility
     vehicles (Ulyanovsk, Middle Volga); Volga sedans and GAZ trucks (Niznny
     Novgorod, Upper Volga); KAMAZ heavy trucks (Naberezhnye Chelny,
     Republic of Tatarstan, Upper Volga). Under the centralized economic model,
     most components of the vehicles were produced either by the same
     companies or their subsidiaries.

     This historical monopoly of local automotive manufacturers was broken
     around 12 years ago, when Russian consumers began to change their
     preferences from new Russian cars to second hand models, imported from
     Europe and Japan, and later, after a national economic recovery in early
     2000s, to new foreign cars, assembled in or imported to Russia. This new
     tendency covers, primarily, cars and sports utility vehicles (SUVs), and partly,
     light commercial vehicles (LCVs) and mini-vans. The local producers of
     medium and heavy trucks are in a better off position for they continue to
     control a vast niche in the national market, and steadily increase exports to
     CIS, and to some Asian and African countries.

     Facing challenges from foreign car manufacturers and Russian consumers,
     the automotive corporations of Upper and Middle Volga have started to
     develop medium- and long-term strategies to retain their niches in the
     Russian market through cooperation with foreign automotive companies
     (including car assembly and auto components production), considerable
     investments, improvement in quality management systems, and better use of
     their market advantages: sales channels, service and maintenance centers,
     cooperation with local governments.

II. Automotive market overview
  The population of Russia demonstrated a steady growth in consumption of new
  cars starting 2004, when the local banks began to actively develop car loan
  programs. For the period 2004 – 2007, sales of new cars grew at a minimum of
15% per year in Russia. In 2004, sales were equally divided between Russian
and foreign cars, but the balance was broken in favor of foreign cars, assembled
or imported into Russia, in 2005.

Official statistics reported the following sales of new cars in Russia for the period
from 2004 till 2008:
- 1.610 million cars in 2004
- 1.834 million in 2005
- a little over 2 million in 2006
- 2.345 million in 2007
- 2.702 million in 2008

In 2008, sales growth was recorded in almost all segments of the market, except
for “city” cars (2.1% lower than in 2007), “luxury” cars (decline of 15.8%
compared with 2007), large mini-vans (5.2% lower than in 2007). The largest
growth was recorded in the segment of diesel engine cars, which came to 74.2%
compared with the year 2007. However, the share of diesel engine cars remains
to be insignificant on the market in general – 3.2% of the total car market.

The below table will help to estimate the tendency of the development of the
market in 2008 in comparison with 2007

 Car Category              Thousand (units)                        USD (billion)

                     First six    First six    Diff’ce     First six    First six   Diff’ce
                     months       months                   months       months
                      2008         2007                     2008         2007

Russian cars              380           300       27%           $3.5        $2.4       46%

Foreign cars              290           205       41%           $4.8        $2.8       71%
produced in

New car imports           785           510       54%         $22.2        $13.2       68%

Used car                  190           150       27%           $3.3        $2.2       50%

Total                   1,645         1,165       41%         $33.8        $20.6       64%

Sources: Russian state statistics committee, Russian state customs committee, ASM Holding
Starting early months of 2009, the automotive market of Russia has been facing
considerable changes caused primarily by the world economic crisis. That
affected the local production and assembly of vehicles, general sales and
consumption on the local market.

According to forecast estimation of the analytic agency “AUTOSTAT” for the first
six months of 2009, there were nearly 730,000 of new passenger cars. This was
by 48.6% less than for the first six months of 2008 (1.42 mln units). The analysts
estimated the sum capacity of market on totals of the first six months (in money
terms) around USD 13.5 billion which was by 58.6% less than the same index of
the last year (USD 32.6 billion).

As the director of the agency “AUTOSTAT” Sergej Tselikov reported, the
significant drop of capacity of market in money terms was caused by significant
drop of sales (- 48.6%) and by drop of average price of cars in USD by 19.2% -
from USD 22,900 to USD 18,500.

The sales of direct import cars was decreasing faster (-70%) than the assembled
foreign cars inside the country (-52%). Reduction of inventory at sites of official
dealers (stocks) during this period is estimated by analysts in 110 – 120
thousand cars. According to the head of AUTOSTAT Agency, in the third quarter
of 2009 the sale of new cars may decrease and become lower than at the
present moment, while the start of recovery of market should be expected not
earlier than spring 2010.

The analysts noted that the sale of Russian models and foreign cars during the
first six months were falling by the same rate. During the first 6 months of 2009
there were imported 284,400 of passenger cars to Russia, which was 71% less
than the corresponding period of last year (984,200 units). In June 2009, there
were imported 47,300 cars to Russia, which was 74% less than the same index
of last year. The specialist of “AUTOSTAT” noted that the biggest number of
imported cars for the first 6 months 2008, were Nissan (34,268 units), Chevrolet
(28,699 units), Toyota (27,747 units), Hyundai (24,600 units) and Kia (23,932
units). Almost half (48.9%) of the total imports was made up of these five makes.
Among other brands with rather significant volumes of import were: Mazda,
Peugeot, Daewoo, Ford, Honda, Suzuki, Opel and Audi. Meanwhile the import of
cars of such makes as Renault and Skoda, which were assembled in Russia
decreased by over 10 times.

The share of second hand car market this year decreased almost by 20 times
and constituted only 3% now. While a year ago, nearly 20% from the total volume
of import accounted on second hand cars. It was also noted that, in the first half

of 2009 the importers continued to import cars of 2008 model’s year. Total of
160,000 of last year’s foreign cars entered Russia, which corresponded to 56.4%
from the total volume of import.

As for the production of automotive vehicles in the first half of 2009, according
to ASM-Holding, the Russian factories had produced 339,893 passenger cars,
trucks and buses. This was 2.6 times (62.4%) less than last year, when the
volume of production reached 903,728 units. During the first 6 months of 2009
the volume of production of passenger cars of traditional domestic makes
decreased by 65.1%, while the drop of output of foreign cars was less by 53.4%.

The leader of the Russian car industry, AVTOVAZ, restarted production in
February 2009, and continued to work in a shortened period, that was why its
indexes of production were less than last year by 63.7% (139,404 cars).
“IzhAuto” which operated three days a week this year, has stopped the
production line at the end of April 2009 in relations to the stop of deliveries of car
parts for assembly of Kia and has decreased the output of cars by 69.2% to
9,797 units. Because of the stop of production of sedans Volga Siber by GAZ
since March until June 2009, the output of passenger cars at this enterprise
dropped by 97.1% and constituted 445 cars. UAZ, which started operating in the
middle of February of 2009 (in three working days shift), had produced 4,661
cars or 69.6% less than a year before. Kaliningrad based enterprise “Avtotor”
produced a total of 29,771 foreign cars during the reported period, which was
46.3% less than 2008. Output of trucks during the first half 2009 decreased by
72.5% to 39,523 units. Production of buses for the same period constituted
13,064 units, which was 64.2% less than last year.

The main reason of significant dropl of the Russian car market in the first half of
2009 was a significant reduction of volumes of giving the credits for purchase of
cars. The specialists of “AUTOSTAT” estimated that the purchase of cars on
credit during the first 6 months of 2009 were between 130,000 to150,000 cars.
During the same period of last year a total of 700,000 new cars were sold on
credit. Meaning that, the drop of this segment of market constituted of nearly
80%. At the same time the sales of cars purchased by cash, recorded a short
decrease of only by 18%.

The biggest drop of market of automotive credit took place in winter. Then, based
on the background of devaluation of Ruble and of significant growth of interest
rates, the banks had almost stopped to give credits and the monthly volume of
this market decreased nearly 10 times. Since spring, the market of car purchased
by credit started to revive. At one end, a temporary stabilization of rate of
international currency contributed to this, on the other end it was due to the
development of new joint credit products between banks and car manufacturers.
  Besides that, the government offered a program of subsidizing of interest rates
  for purchasing cars of domestic production. The further outlook of the market of
  car purchased via credits will depend on the stability of currency markets and of
  accessibility of long-term money resources for bank sector.

III. Russian automotive manufacturing sector
  Automotive assembly companies in Russia can be divided into two categories:
  recently privatized old Russian automotive factories and new SKD and CKD joint
  assembly projects with well-known foreign automobile manufacturers.

  Russian OEMs

  Before 2002, Russian automotive manufacturing industry was concentrated
  mainly in the Volga valley. The Upper and Middle Volga regions were known for
  a high concentration of mechanical engineering companies, which manufactured
  a wide range of products for aerospace, shipping, and automotive sectors of the
  Russian economy. The regional automotive cluster is led by three local

  -   AVTOVAZ (, Samara Region, Togliatti, Middle Volga

  -   KAMAZ (, Republic of Tatarstan, Upper Volga

  -   GAZ (, Nizhny Novgorod Region, Upper Volga


  Up to date JSC AVTOVAZ remains the largest car manufacturer in Russia. In
  2006, the major stake in AVTOVAZ went under control of RosOboronExport – a
  federal state unitary enterprise, affiliated with the federal government.

  In November 2008, the AvtoVAZ market share in Russia was around 27%
  against October’s, 25%. All in all, the AvtoVAZ sales and service network sold
  over             585,000                LADAs            within            the
  eleven months of 2008, a 2.6% decrease against the same period in 2007.
  More than 86,600 units of LADA Kalina were sold from January through
  November 2008, a growth of 23.8% against the same period a year ago.
  LADA Priora’s sales increased by 70,200 cars compared to 2007, to 119,500
  cars             within               the           eleven            months.
  From January through November of 2008, over 102,200 automobiles were
  exported, an increase of 4.1% against the same period in 2007.
  In 2008, AvtoVAZ also expanded its output volume. For the first eleven

months 2008, the company produced 742,800 cars, which was 10.3% more than
2007. However, in the year 2009, the production capacity of the leader of the
industry suffered significant decline. Thus, for the period of January – May 2009,
the output of AVTOVAZ reached 106,235 units only.

General reduction of the production capacity for the first 5 months of 2009 of the
Russian OEMs recorded a drop of 67.9% compared with the same
corresponding period in 2008.


KAMAZ Group of Companies is one of the largest automobile corporations of the
Russian Federation. KAMAZ Inc. ranked 11th among the leading world heavy
truck manufacturers and took 8th place in the world by production volumes of
diesel engines in 2008.
KAMAZ is controlled by the company’s management, although the list of its
shareholders includes representatives of the local and federal government, and
major national financial institutions.
KAMAZ Group of Companies include 96 enterprises among which, there are
OAO “Tuimazy Concrete Delivery Truck Works”, OAO “NEFAZ” (Neftekamsk)
and OAO “Avtopritsep-KAMAZ” (Stavropol).
KAMAZ Inc. produces a wide range of trucks (over 30 models, more than 400
kits of right hand drive vehicles), trailers, buses, tractors, engines, power units
and different tools.
Production capacities of subsidiaries and associated companies since 1
January 2008 included 71,000 trucks, 60,000 power units and 1,500 buses
KAMAZ Inc. has a number of assembly projects with foreign countries, such as
Vietnam, Iran, Kazakhstan, Pakistan and North Korea. Assembly is carried out
completely of components delivered from KAMAZ. The company comes to
agreement with foreign partners about the program of local production local in
the countries where assembly enterprises are located.
Alongside with AVTOVAZ, KAMAZ was the first to apply to the Russian
government for the customs duty benefits on auto components, imported from
foreign suppliers for KAMAZ trucks. Opposite to some large Russian
corporations, which choose buying a license to assemble foreign vehicles in
Russia, KAMAZ prefers to develop its own production and technology. To
increase the quality of auto components used in KAMAZ trucks, the corporation
sets joint ventures with the leading foreign producers:
-   A U.S.-Russian JV Cummins-Kama. The enterprise produces Euro-3 and
    Euro-4 motors with electrical control
-   A German –Russian JV ZF-Kama. The enterprise produces transmission
-   A German – Russian JV Knorr-Bremse Kama. The company produces brake
-   A U.S-Russian JV Federal Mogul Naberezhnye Chelny, which produces
    piston assemblies
In the fourth quarter of 2008, the company faced a sharp truck sales slowdown in
Russia and CIS countries which had been provoked by the drop of economic
activity on the markets of these countries. In Russia, the economic recession
affected most of the industries which are traditionally the main clients of KAMAZ
– mining operations, metallurgy, construction and cargo transportation.
It became the main reason why the truck sales volumes reduced by 5,000 units
(declined by 9.8%) in 2008, in comparison with 2007. In 2008, 47,500 vehicles
were sold, 11,300 of which were for export. Nevertheless, the company’s market
share of 28%, made KAMAZ remained the leader on the Russian truck market
and on the whole continued developing on foreign outlets. KAMAZ maintains the
leading positions in all production segments of the Russian market of trucks with
14 - 40 tons GVW (from 38% to 50%) except the long-haul tractors.

GAZ Group

GAZ group is considered to be the second largest automotive company of Russia
after AVTOVAZ. GAZ group is affiliated with the national holding group Bazovy
Element (Basic Element: ), which controls assets in 6 sectors –
energy, machinery, resources, financial services, construction and development.
Apart from that, GAZ Group is also a part of Russian Machines Corporation,
which represents the machinery sector of the holding company Basic Element.

GAZ Group was established in 2005 with the restructuring of RusPromAuto’s
production assets. As at today, GAZ group comprises of 18 enterprises,
producing cars, buses, commercial vehicles, heavy trucks, construction vehicles,
diesel engines, fuel systems and power-train components.
The niche of light passenger vehicles produced at GAZ automotive works is
relatively small, and it does not exceed 5-7% of the total amount of cars,
produced in this country. However, the GAZ Group is the fourth largest buses
and seventh largest light commercial vehicle manufacturer in the world.

Commercial Vehicle Plant based in Nizhny Novgorod city is Russia’s leading
LCV manufacturer, producing the most popular GAZelle and Sobol LCVs.
Pavlovo Bus Plant is Russia’s leading producer of urban, suburban and intercity
buses      and      manufacture        the    PAZ      range    of      buses.
Likino    Bus      Plant     builds      the   LiAZ     range    of    buses.
Avtodizel (in Yaroslavl City) is Russia’s leading diesel engine manufacturer
producing the YaMZ diesel engines. Ural Truck Plant manufactures the URAL
heavy on and off-road all wheel drive (AWD) cargo trucks.
In April 2006, Group GAZ bought a license and the equipment from
DaimlerChrysler to produce restyled models of Chrysler Sebring and Dodge
Stratus at its plant in Nizhny Novgorod. The design production capacity of a new
plant is 65,000 cars per year. In March 2008, the Group started production of
pilot batch of new Volga Siber car – a luxury sedan car. The car is 70%
assembled from components of world leading suppliers of the USA and Europe –
Magna, Bosch, TRW, Valeo, ZF and others. Localized components for Siber in
Russia are also delivered by companies meeting the world quality standards –
Russian assembly plants of Magna, Automotive Lighting, Lear Corporation,
Tenneco Automotive and others.

 GAZ Group made two more corporate purchases to level up its technology edge.
Thus, it purchased the U.K. based company LDV (, producing
LCVs under the brand name Maxus. Maxus commercial vehicles should enter
the high-end segment of the LCVs family, produced at GAZ automotive works.
GAZ Group also invested Euro 57 million in the diesel motor plant, purchased
from Renault trucks. The new plant is located in the Yaroslavl Region, Upper
Volga, and its annual production capacity is 20,000 units of DCi11 medium and
heavy diesel motors, complying with Euro-3 ecological standards. The experts of
GAZ group have also developed a heavy diesel motor with the Austrian company
AVL ( to be mounted on heavy trucks and buses.

GAZ group also signed an MOU with Magna International Europe to set two JVs
for production of plastic parts for exterior and interior components of vehicles
(including bumpers), assembled by GAZ in Nizhny Novgorod, and pressed metal
parts. Total investment of GAZ group into the project with Magna International
Europe is estimated at Euro 300 million.

Enterprises of GAZ Group are traditional suppliers of their manufactured
products to different sectors: healthcare, agricultural, law enforcement bodies.
In 2009, GAZ Group plans to develop further export activities, close cooperation
with corporate customers, increase sales of spare parts and services, increase
sales of finished products by means of lowering down the prices by 20%.

According to Russian State Statistics Committee, the comparison results on the
production output of vehicles in Russian for the first five months 2008 and the
respective period of 2009 were as follows:

                                                Thousand Units

          Car Category          January - May    January - May      Difference
                                    2008             2009

   Total output of automotive      746,773          271,997           63.6%
   vehicles including
   commercial vehicles, light
   commercial vehicles,
   buses, passenger cars

   Passenger cars produced         598,203          230,234           61.5%
   in Russia

   However, foreign car designs and brands seem to be set for the biggest gains in
   the coming years, and may overtake the significant market share in the nearest
   forthcoming years. Whereby, the share of Russian-designed vehicles is likely to
   continue to decrease for several reasons:

1. The Russian OEMs do not appear to have the funding or technical capability to
   develop an internationally-competitive car;

2. An internationally-competitive car would require components that are not
   available from the current supply base in Russia and which would have to be
   imported or developed;

3. Current Russian designs have lower reliability and performance than their foreign
   competitors. Russian consumers are clearly unwilling to pay international-level
   prices for these cars;

4. Most Russian OEMs seem to be taking steps to establish production of foreign

   Foreign OEMs Operating in Russia

   A number of the world’s leading automakers are expanding widely in Russia.
   Foreign OEMs operating in Russia represent the fastest growing segment of the
   automotive market and eventually they will likely be the major producers in the
   Russian market. Some of these plants are set as subsidiaries of multinational
   companies, some – as joint ventures with local manufacturers, and others
   organized as licensed production.
            Major Investment Projects in the Automotive Sector of Russia by 2009

No   Investor/Factory Year      Company-                                 Main Project Characteristics
                      of        manufactur
                                              Car model         Investm Projected         Notes
                      Com       er of a
                                              (cost, RUB )      ent     output capacity
                      menc      vehicle,
                      emen      Country of
                      t         origin
1    “IzhAvto” JSC,     2003    KIA,          Spectra           80      2005 – 8,000      Production launched
     “SOK” Group                South Korea   (115 – 145,000)           2006 – 25,000     on 22.08.2005
                                                                        2007 – 40,000
     Izehvsk, Udmurt
1a   “IzhAvto” JSC      2003    KIA           Rio               21.4     12,000           Additional
     “SOK” Group                South Korea   (124 – 144,000)                             agreement

2    “ZMA” JSC          2006    SsangYong,    Rexton (313 –     180      35,000           Production launched
     Sollers                    South Korea   420,000)                                    on 04.10.2006

     Naberejniye                              Kyron (345 –
     Chelny,                    FIAT, Italy   397,000)
2a   “ZMA” JSC          Not     FIAT, Italy   Albea, B       180         N/A              Additional
     Sollers            compl                 (111,000)                                   agreement.
                        eted                  Doblo ,
                        yet                   commercial and
     Elabuga                                  vehicle
                                              D200, D
                                              Passenger cars
3    “GM -AVTOVAZ”      2001    Chevrolet     Niva (122 –    338.2       100,000          Joint agreement
     CJSC                       Niva,         200,000)                                    between GM,
     Tolyatti, Samara           AVTOVAZ-                                                  AVTOVAZ and
     region                     GM            Viva (137 –                                 European Bank for
                                              207,000)                                    Reconstruction and

4    “Avtoframos”       1999    Renault,      Logan (94 –       380      75,000           The Avtoframos was
     OJSC                       France        140,000)                                    formed as a joint
     Moscow                                                                               venture between
                                                                                          Renault and the
                                                                                          Moscow City
5    “General Motors    2007    Chevrolet,    Captiva (SUV)      300   27,300         The automotive plant
     Auto” LLC                  USA           J- 300,000                              was opened in
                                              (sedan)                                 November 2008.
     St-Petersburg                                                                    In summer 2009, the
     region,                    Opel, USA     Antara (SUV)                            company is planning
     Shushary-2                                                                       to launch one more
                                                                                      model – Chevrolet
6    “Volkswagen        Oct.    Volkswagen,   Octavia A-5        774   125,700        In 2009, the models
     Group Rus” LLC     2006    Germany       (197 – 340,000)                         range manufactured
                                              VW 231                                  by “Volkswagen Rus”
     Kaluga                                                                           will be extended to
                                                                                      another 3 models:
                                                                                      Passat CC, Golf and
                                                                                      Multivan T5
7    “Toyota Motor      2006    Toyota,       Camry (309 –       220   200,000 (max    The plant was
     Manufacturing              Japan         432,000)                 estimated      commissioned in
     Russia” LLC                                                       capacity)      2008

     Shushary, St-
8    “Nissan Motor      2009    Nissan,       Teana, X-Trail     219   50,000         The production
     Rus” LLC                   Japan                                                 output to be
                                                                                      increased from
     St-Petersburg                                                                    50,000 to 500,000
     region                                                                           cars a year
9    “Ford Motor        July    Ford, USA     Focus, Mondeo      520   75,000          Ford has three local
     Company” CJSC      2002                                                          offices in Russia: St-
                                                                                      Petersburg, Samara
     Vsevolzhsk,                                                                      and Nizhny
     St-Petersburg                                                                    Novgorod. Ford
     region                                                                           pioneered a car loan
                                                                                      program in Russia
10   “Seevrstal-avto-   2006    Fiat, Italy   DUCATO             180   75,000
     YELABUGA” LLC                            (CLV&MPV)
     Tatarstan                  ISUZU,        ELF light trucks         10,000
11   JV “Suzuki-PSA”    Plan    Suzuki,       Grand Vitara,      120   70,000 (1st
                        to      Japan         Sx4                      stage)
     St-Petersburg      launc                                          140,000 (2nd
                        h in    Citroen,      C4                       stage)
                        2009    France
                                Peugeot,      308

12   “TagAZ”         1998    Hyundai,      Hyundai          320,000   N/A         Near plans of TagAZ
                             South Korea   Accent, Sonata                         are further
     Taganrog city           Daewoo,                                              broadening of the
                             South Korea   Hyundai Porter                         model range.
                             Citroen,      (light trucks)                         Hyundai vehicles are
                             France                                               produced under
                                                                                  license agreement.

           The first foreign enterprise which opened the gates for producers of foreign
           brands in Russia was Ford Company, which launched the plant in Vsevolzhsk,
           Saint-Petersburg in 2002 for the production of Ford Focus. It was a hit of sales
           with foreign cars in Russia for the past several years. In 2006, Ford sold almost
           116,000 cars, SUVs and LCVs in the Russian market, where the sales of Ford
           Focus made 73,468 cars.

           Local assembly plant (Ford Motor Company ZAO) has contributed to rapidly
           growing sales of Ford cars in Russia. Thus, according to data of “AUTOSTAT”,
           the most popular foreign car in Moscow is Ford Focus. For the beginning of 2009
           there were 87,100 registered cars of this model. Ford has three offices in Russia:
           Saint-Petersburg, Samara and Nizhny Novgorod. In order to further stimulate
           sales Ford pioneered a car loan program in Russia.

           According to the agreement between Ford and the Ministry of Economic
           Development of the Russian Federation, the company will be allowed to bring
           auto components at preferential tax rates for a 7-year period. During this time,
           the producer has to reduce by one third the share of imported components. Ford
           claims that locally made parts account for approximately 40% of the total. It
           should be reminded that, previously the Ford’s assembly operated under bonded
           warehouse regime, and the assembled cars needed to pass through customs
           clearance. As at today no clearance from customs is required.

           Another car maker which plays significant role on the local market of automotive
           producers is a locally based company Avtotor, a Kaliningrad based company fully
           owned by Russian investors. “Avtotor” group of companies has been performing
           SKD assembly of foreign brand cars since 1997 in Kaliningrad special economic
           zone. Today, the main feature of “Avtotor” is production of 27 models of 7
           following brands that differ in type, technology and quantity:

           -   BMW: 3 series, 5 series, X3
           -   KIA: Carnival, Magentis, Opirus, Cee’d
           -   GM: Hummer 3, Hummer 2, Chevrolet Trailblaser, Chevrolet Tahoe, Cadillac
               STS, Cadillac BLS, Cadillac SRX, Cadillac Escalade
           -   GM-DAEWOO: Chevrolet Aveo, Chevrolet Lacetti
           -   YUEJIN: low and middle capacity trucks

-   Motorcycles

Total investments by AVTOTOR at the moment exceeded Euro 380 million. Total
production output in 2008 reached 108543 vehicles.

GC “Avtotor” is comprised of the following companies:
- 3 production plants in Kaliningrad
- 2 trade houses under OOO “Avtotormarket” name, which are engaged in sales
of motorcycles, other light duty and heavy duty vehicles
- OOO “Fast car”, engaged in sales of spare parts
- ZAO “Avtotortrans Ltd”, which provides transportation and forwarding services
- OOO “Avtotor-Zapchast”, engaged in supply and distribution of spare parts

For the past few years, Chinese car makers have been showing their high
interest towards automotive production and assembly in Russia. Thus, Chinese
Cherry expressed intention in setting up assembly with “Avtotor”. The company
announced, it was prepared to invest up to USD 200 million in a separate
assembly plant with annual capacity of 150,000 cars. It is expected that 50% of
the output will be sold in Russia and CIS, and the rest will be exported to Eastern
Europe. “AVTOTOR” will be Cherry’s partner in this project.

Another Russian distributor of Chinese cars is “Irito”, a leading Russian importer
of automobiles from China. Currently, Irito sells the following Chinese car brands:
Great Wall, FAW, BYD Auto, Hafei Motor, Foton, DFM. Irito expressed intention
to organize assembly of BYD Flyer cars in Ramenskoe District of Moscow
Region. The company already applied to the Ministry of Economic Development.
The facility’s capacity should be around 25,000 vehicles per year. The project
required initial investment of USD 37 million.

Another Chinese car producer Great Wall, decided to set up its assembly in
Tatarstan, as there is a free economic zone there. The company aims to invest
USD 100 million from its own funds and to attract its suppliers to Tatarstan, who
could set up component production there. The projected capacity was
announced at 45,000 units. The company intended to use the facilities of
Elabuzhsky car plant.

Chinese SAIC (state-owned Shanghai Automotive Industry Corporation) held
talks with AvtoVAZ to set up a joint assembly. SAIC produces passenger
vehicles, trucks and heavy vehicles.

Minding the large amount of investment projects which are currently on in
Russia, needless to say that the share of foreign cars, produced in Russia, has
been growing rapidly for the last 4 years.

    Even though the performance of the automotive sector in H1- 2009 has been
    showing terrific decline at 55%, the most competitive subsector remains the one
    representing cars of foreign brands produced and assembled locally in Russia.
    The range of most popular budget-wise cars in Russia includes Ford Focus,
    Toyota Corolla, Mitsubishi Lancer, Hyundai Accent, Daewoo Nexia, Chevrolet
    Aveo, Lacetti and Lanos models, Nissan Almera, Mazda 3 and Opel Astra.

     According to AUTOSTAT, for the first six months of 2009, there were nearly
    730,000 of new cars. This was, 48.6% less than 2008 (1.42 million units). The
    analysts estimated that the total capacity of market for the first six months (in
    value terms) is USD 13.5 billion which is 58.6% less than the same index of
    last year (USD 32.6 billion). The significant dropl of capacity of market in money
    terms was caused by significant drop of sales (-48.6%) and by drop of average
    price of cars in USD by 19.2% - from USD 229,000 to USD 185,000.

    The analysts noted that the sale of Russian models and foreign cars during the
    first six months were falling by the same rate. The direct import was decreasing
    faster (at -70%) than the assembly of foreign cars inside the country (at -52%).
    Reduction of inventory at sites of official dealers (stocks) during this period was
    estimated around 120,000 cars. According to AUTOSTAT, the start of
    reconstruction of the market should be expected not earlier than spring 2010.

IV. Government Regulations in Automotive Sector
    The Russian Government industrial policy is directed towards granting incentives
    for both domestic and foreign investors to produce vehicles and components
    inside of Russia.

    In July 2002, the Russian Government published “A Concept for the
    Development of the Russian Car Industry”. The concept was for the period up to
    2010 and suggested goals, tasks and priorities to improve automotive industry
    performance in Russia.

    The Concept sets the following objectives:

-   integration of the Russian car industry into the international automotive sector
-   production of vehicles fully compliant with world requirements on environment
    and safety
-   creation of new production facilities
-   development of competition in the market step by step.

    In March 2005, the Russian government took the decision to decrease drastically
    import taxes for automotive components imported by OEMs. The government
    decision anticipated that import taxes will be either abolished (engines, power
trains, exhaust systems and body parts) or cut to as low as three percent
(starters and spark plugs) for components supplied to assembly projects.

As the result, current assembly projects were encouraged by two Decrees of the
Russian federal government: Decree 166, issued in early 2005, and Decree 566,
issued in late 2006. Decree 166 determined minimum customs duties on
imported components for automotive assembly plants, when duties vary from 0 to
maximum 15% depending on a category of an imported product. The first Decree
had set benefits for assembly projects, while the second decree (# 566) provided
benefits for manufacturers of automotive components in Russia.

The second Decree had put down the customs duties on materials and basic
units, necessary to produce automotive components. The list of car producers
from the North America, Europe and Asia, opening their plants in Russia, would
be soon supplemented with a number of other foreign companies, leaders of the
auto component market, which have already confirmed interest to open their
plants in this country. Such companies as Magna International Inc. (Canada), a
group of German companies, like Siemens AG, Robert Bosch AG, Linner,
Zahnrad Fabrik Friedrichshafen AG and others have already launched their
projects in Central Russia and in the Volga Valley of Russia.

Particular attention is drawn by the Russian Government towards production of
automotive components to satisfy the needs of car assembly plants in Russia.
Thus, in 2007 former president of Rf, Mr Vladimir Putin, presented at the
ceremony of launching of the construction of an automotive components plant in
Saint-Petersburg, announced that “St-Petersburg will soon become the largest
center of automotive production in whole Russia. According to forecasts, by the
year 2012 – 2015 there will be over 500 000 vehicles produced in St-Petersburg
and nearby districts. Such high figures are the perfect justification of the
necessity to have own components base established in Russia to meet the
demands of automotive manufacturers.“

Russian government also set the following requirement for assembly facilities,
i.e. within 2.5 years after the start of assembly operations, 30% of auto
component output should be outsourced from Russian plants. In addition to this
requirement, there is the regulation for car assemblers operating in free
economic zones. These companies will have to use at least 50% of homemade
automobile parts in order to qualify for zone residency.

This opens opportunities for component manufacturers to supply their products to
OEM, transfer modern technologies to local component manufacturers or invest
in local component production. Thus, major car manufacturers located in Russia
(both of Russian origin and foreign companies), as well as other market players

    are looking seriously on the set up of manufacturing facilities for production of
    automotive components inside of Russia itself.

V. Foreign Projects of Auto Component Production in Russia
    As at today, there are several dozen of foreign projects related to automotive
    component production in Russia. Component manufacturers from Western
    Europe are the most active players in this market segment. Below is the list of
    foreign largest component manufacturers:

-   Stadco, a joint venture with Severstal-Auto, Tatarstan for metal press forming
-   Cummins, a JV with KAMAZ Cummins-Kama, Tatarstan: production of diesel
-   Robert Bosch AG, a JV Bosch-Saratov, Saratov region: production of ignition
    plugs and motor drive circuitry
-   Robert Bosch AG, a joint project with Zahnrad Fabrik Friedrichshafen AG,
    Samara region: production of fuel systems and transmission components
-   Zahnrad Fabrik Friedrichshafen AG, a JV with KAMAZ ZF-Kama, Tatarstan:
    production of transmission systems
-   LINNER: production of grease filters
-   Hella Autotechnik, a joint project with SOK Group: production of front light lamp
-   Delphi, a joint project with Samara Cable Company (SOK Group): production of
    wire bundles
-   WOCO, WOCO plant: production of industrial rubber and rubber metal articles
-   Tudor, a JV Tudor: production of batteries
-   Autocomponent Engineering, a JV with Plastic company: production of
    steering wheels with safety cushions
-   Tenneco, Tenneco Automotive Volga Plant: production of dash pots and filters
-   Bor Glassworks, a part of Asahi Group: producer of windshields and side
-   Benteler, R &D works in Veliky Novgorod: chassis structures, engineering
-   Johnson Controls, production sites in Niznhy Novgorod and Tver for seat
-   Magna International, a diversified automotive supplier for car systems (seating
    systems, closure systems, structural systems, vision systems, electronic
    systems, exterior systems, powertrain systems, roof systems, ), modules,
-   Glaverbel, a partnership with Bor Glass factory: production of glass
-   Lear Corporation, Lear Plant based in Nizhny Novgorod: production of seats
-   NYPRO, plant located in Moscow: production of injection molded plastics
-   Connecto AB (Sweden), a partnership with Finnskor located in Vyborg:
    production of wire harness
-   Breed Technologies, a partnership with Autocomponent engineering (Italy) and
    Plastic, Syzran (Russia): production of airbags/steering wheels
-   Michelin, a partnership with Greenfield in Moscow region: production of tires
-   Continental, a partnership with Moscow Tire Factory: production of tires
-   Nokian, a partnership with Kirov Tire Factory: production of tires
-   Matador, a partnership with Omsk Tire Factory: production of tires

    Apart from foreign manufacturers of automotive components and parts, Russian
    producers undertake active steps towards the set up of components
    manufacturing plants. Such initiatives are actively supported by the Russian
    Government. The largest and most significant deal in this industry was recently
    finalized with Government’s participation. Thus, Russian State Corporation
    “RosTechnologii” initiated the set up of the largest holding company for the
    production of automotive components. According to the General Director of State
    Corporation, Mr Sergey Chemezov, the newly set up Holding company will
    occupy 40% of the total Russian market of automotive components.
    Incorporators of the Holding are: State Corporation “RosTechnologii” and OJSC
    AVTOVAZ. Third party participating in the Project is local investment company
    “Troika Dialog”.

    Largest automotive manufacturers, namely “KAMAZ” and “Renault-Nissan”
    alliance expressed intention to join the Automotive Components Holding.
    Thus, the Holding is going to take over component manufacturing bases of
    AVTOVAZ and KAMAZ. In addition to that, the Holding intends to create new
    manufacturing facilities, where some of them will be organized in collaboration
    with foreign players.

VI. The Market of Automotive Components

    Presently automotive components market is represented by parts and
    components for OEM needs and replacement parts market.

    According to AUTOSTAT agency, in 2007, the breakdown between the primary
    and secondary auto components markets in Russia was 24% and 76%
    respectively. In the same year, there were around 440,000 foreign brands
    manufactured in Russia, and the value of auto components produced in Russia
    for assembly of Russian-made foreign brands was USD 360 million. Still, the
    majority of components for the local production were imported.

    However, the market of automotive components, especially its primary subsector,
    has been facing certain changes for the past 2 years. According to the forecast of
    made in 2008, the primary segment of auto components market will develop as

    Production of car components for Russian-made foreign brands (USD, bln)

    Even though the automotive market in Russia suffered dramatic change since
    the end of 2008 due to the world economic crisis, the market of auto components
    provides bright opportunities for local auto market players and foreign companies
    for the following reasons:

-   Russian car market is the oldest among other European countries, where plenty
    of cars of 10-20 years old and above are still running, which require frequent
    maintenance, repair and servicing

-   Weak competitiveness of local components suppliers

-   Poor presence of the local manufacturers of auto accessories and car care
    products and service equipment

    The market of the wide range of spare parts, accessories and car-care products
    are over 20 million for Russian owners of used car, among which there is
    significant amount of cars of 10-25 years old. Traditionally, many Russians with
    low income preferred to buy spare parts in specialty outlets, in automotive
    aftermarket departments of department stores or in the markets. These retail
    outlets and markets usually source parts and components from wholesalers and
    distributors. Service stations also source the parts for replacement from
    wholesalers, OEM suppliers and distributors. Smaller car repair shops may also
    purchase spare parts in retail outlets according to customers’ needs. It is very
    common that car importers/dealers establish service station, which provide both
    guarantee and after-guarantee service.

End-users of imported automotive parts are presented by owners of imported
cars and owners of Russian-made foreign brands of 3 years old and above.

Another group of end-users, which consume spare parts for trucks and buses
include transportation and freight-forwarding firms having a fleet of trucks and
municipal transportation agencies operating a fleet of buses and minivans.

The fleet of heavy and light commercial vehicles in Russia is mostly comprised of
imported foreign brands from the secondary markets. The most widely spread
are: VOLVO, MERCEDES, DAF, IVECO AND SCANIA. The most popular imported buses
and minivans include European, Japanese and Korean models: Ikarus,
Mercedes, Iveco, Scania, Toyota, Hiace, Ford, Transit, Hyundai VW Transporter.

Auto accessories such as stereos, radar detectors, car alarm systems, washing
and polishing products, windshield fluid, oil and gasoline additives are not widely
produced in Russia. Some accessories began to be produced based on western
technology in joint venture partnership between Russian companies and Western
manufacturers. In this category are wheels and tires, motor oil, batteries and

Traditional key suppliers of auto components, parts and accessories are
European countries and the USA. Italy is one of the largest suppliers of a wide
range of service equipment to Russia. Their products include pneumatic tools,
jacks, testing and diagnostic equipment, washing, painting, tire removing and
wheel balancing equipment. Other suppliers of service equipment are Poland,
Hungary and Bulgaria, whose products are competitive in price, but of lower

Most of car stereos are coming from Japan and Germany. Major suppliers of tires
are Finland, Germany, Japan and France. The US companies are suppliers of
one of the largest suppliers of car-care products and accessories to Russia, such
as alarm systems, motor oil (Mobil, Texaco, Esso and Valvoline).

Important to mention aggressive market policy of Chinese auto component
manufacturers, who have been promoting wide range of components, car
accessories for the last 4 - 5 years on the Russian market. Due to low costs of
Chinese products and Chinese active marketing, they managed to win significant
market share, especially in the segment of fast moving replacement sector.
However, the Russian market players are now concerned on the quality of
products supplied, therefore, they prefer to deal with alternate suppliers, who
may offer good quality and attractive prices, as Chinese makes cannot compete
in terms of quality.

       Components range which has good sales prospects in Russia and current
                           import duty rates applicable

            HS CODE                 PRODUCT TYPE                IMPORT DUTY
   8421                        Oil/Fuel/Air filter         5%
   8511                        Spark plugs                 5% - 15%
   870830                      Brakes                      5%
   870840                      Gear boxes                  5%
   870880                      Shock absorbers             15%
   870891                      Radiators                   5%
   870892                      Mufflers and exhaust        5%
   8507                        Batteries                   5% -15%
   4009                        Rubber hoses, tubes         5%

VII.     Certification

   All automotive products sold in the Russian market must be certified. Certification
   is an important consideration for prospective imports, as any new product to be
   used or consumed by the public is subject to certification for quality, conformity
   and safety. Certification requires testing and approval of a product sample. The
   final certificate permits the company to import its product for sale on the Russian
   market. The length of the certification procedure depends on the complexity of
   the product and the number of tests required. Chief State Agency responsible for
   certification of auto components, parts and products related to automotive
   industry is NAMI (Federal State Unitary Enterprise “Central Scientific
   research Automobile and Engine Institute” of the Russian Federation):
   125438, Moscow, Avtomotornaya,2
   Tel/Fax: +7 495 153 21 01
   Mr Alexei A. Ipatov/General Director

   Certification is normally a time-consuming and tedious process, which exporter of
   a product cannot manage on his own and requires collaboration and assistance
   of a local Russian partner, who can handle this process.

   Besides certification, imported auto parts and components have to be
   supplemented with the Russian language specifications.

VIII. Opportunities for Malaysian Manufacturers and Exporters and
      Recommendations for the entering the Russian market

     Despite of the current economic crisis and general decline in the automotive
     sector of Russia, Malaysian companies engaged in automotive sector may find
     excellent opportunities on the Russian market.

     1. Growing number of automotive projects in the North-West of Russia, Central
        Russia, in the Urals and Volga area opens business opportunities for
        component manufacturers to supply their products to OEM, both Russian and
        Foreign car brands, to transfer modern technologies to local component
        manufacturers or invest in local component production within a frame of a
        joint venture with the Russian partner.

     2. Besides the primary market, Malaysian manufacturers and exporters should
        also explore opportunities in the aftermarket, as the Russian car market is
        considered to be the oldest in Europe and there are millions of cars of 10-25
        years old, which require frequent maintenance, repair and other services.

     3. Automotive projects, implemented in Russia are often developed either
        directly or with involvement of well-known multinational automotive
        companies, which are interested, in its turn, in reliable counterparts and sub-
        contractors. Even though, the Russian market has been taken over by major
        automotive brands, auto components suppliers and manufacturers of local
        Russian and foreign origin, Malaysian companies still have opportunities on
        the market and can offer products and production technologies of superior

     4. Malaysian companies, engaged in automotive production, may consider
        opening of a production site in Russia, which will allow them to gain certain
        market niche for extensive period of time. Liberalization of customs duties on
        supplies of raw materials and units for auto components production widens
        the range of customers from assembly plants to producers of auto
        components. It is not announced openly that local companies are also
        interested to improve their managements systems and to optimize business
        processes, and Malaysian expertise may be highly demanded there.

     5. Further development of automotive industry in Russia will also create
        additional business opportunities for Malaysian companies, which deal in
        aftermarket and sell equipment for automotive production as well as products
        for car service, repair and maintenance.

6. Main competitors of Malaysian manufacturers and exporters of auto
   components to the Russian market are: China, Taiwan, Korea and Thailand,
   where the leading position is occupied by Chinese companies.

7. The most important factors that must be considered by Malaysian
   manufacturers of auto components and interested in entering the Russian
   automotive market are:

         - competitive and attractive price. The market is very price-sensitive,
   so the exporter will have to offer the lowest possible export price to beat
   competitors. If necessary, re-consider your pricing strategy only after you've
   achieved brand recognition, familiarity with retail partners, and your market
   share is secure.

          - high quality performance. As of today Russian market is flooded
   with low quality Chinese products, and the Russian customers start looking
   into the quality performance in parallel with the competitive price.

            - general competitiveness of the products. It is necessary to draw
   attention to the advantages of products, such as exceptional quality,
   innovative features, substantially low prices, or special payment terms.
   Malaysian companies may also offer dealers marketing support that provides
   joint financing for local trade shows and advertising campaigns and a supply
   of promotional materials. Promo materials printed in Russian language can
   also provide additional competitive advantage.

           - ability to handle mixed container shipments. Suppliers of auto
   components should consider ability to deliver wide range of components, and
   to be flexible on MOQ of each type of products exported.

         - readiness to maintain stock in a local warehouse. One of the
   main concerns of the Russian customers is long delivery term from South
   East Asia, which takes on average 2 months. In view of that, Russian
   companies traditionally preferred to purchase from European suppliers. In
   order to overcome this obstacle, Malaysian companies should seriously
   consider the set up of warehousing facilities to keep standing stock of auto
   components in extensive range.

          - readiness to consider investment participation in Russia for
   production of auto components. In view of globalization of economics in
   general and wild expansion of leading automotive manufacturers into foreign
   markets, it is strongly recommended to consider investment practices to set
   up JV in Russia to confirm its presence on the market for next consecutive
      8. Among other recommendations on improving of business relations with
         Russia are the following:

  -   Regular follow up in communication with business partner in Russia. If you had
      initial talks with potential distributors and they expressed interest in your product,
      do not let the communication stall. Be sincere with potential partners. If
      necessary, patiently explain why their terms are not acceptable, and try to find
      mutually acceptable alternatives.

  -   Don't be penny-wise. The minimal investment required to start sales in a typical
      Russian region is approximately $20,000. This amount is necessary for travel to
      Russia, consultant fees, and expenses related to joint promotion, participation in
      a trade fair and product certification.

  -   Consider payment conditions and be flexible in fixing business terms.

  -   Consider the possibility of granting sole distributorship rights to the Russian
      trader. However, exclusive distribution rights should only be granted to a reliable
      partner with a successful history of its business development.

  -   Think regionally. Many Russian dealers are successful in other CIS countries.
      Establishing a market presence in Russia may eventually help you enter other
      regional markets.

IX. Trade Promotion Events

      Malaysian exporters, who are new to the Russian market, are recommended to
      participate in the relevant trade fairs in Russia. The Moscow International Motor
      Show (MIMS) and Interauto, annually held in Russia, Moscow, are the largest
      trade events, which cover the automotive industry.

      These shows are a good marketing tool for foreign companies who are interested
      in entering the Russian market.

      Other Trade Fairs which play significant role in the automotive industry of Russia
      are: Automechanika (International Specialized Exhibition on automotive spare
      parts, components, equipment and car maintenance services) annually held in
      Moscow and Saint-Petersburg. Beginning 2010 the show will merge with MIMS in
      organizing the fairs. Autoindustry and Autocomponents are the largest industry
events annually held in Togliatti, Samara Region, one of the key regions for
automotive production in Russia.

  1. Moscow International Motor Show (MIMS)

Site: Crocus Expo, Moscow
Dates: End of August- beginning of September (annually)
Organizer: ITE Group PLC

Tel: +44(0) 207 596 5188

Fax: +44(0) 207 596 5113


  2. International Exhibition INTERAUTO

Site: Crocus Expo, Moscow

Dates: End of August- beginning of September (annually)
Organizer: Crocus Expo

Tel: +7 495 727 26 31

Fax: +7 495 727 26 31



Site: Crocus Expo/Expocenter

Dates: Early March (annually)

Organizer: OOO “Messe Frankfurt Rus”

Tel: +7 (495) 721 1057,

Fax: +7 (495) 783 23 26



Site: “Olymp” Complex

Dates: October (annually)

Organizer: RTE-Group

Tel: +7 (495) 921 44 07

Fax: +7 (495) 921 44 17


                                    APPENDIX I

           Contact list of major foreign car makers operating in Russia

1. Ford Motor Company ZAO.
  Russia, Leningradskaya obl., Vsevolzhskiy district, Industrial area “Kirpichniy
  Zavod”, 1.
  Tel: +7 812 346 71 11
  Fax: +7 812 346 71 12

  General Motors CIS Representation office:
  Gogolevsky blvd. 11, 9-th floor,
  119019 Moscow, Russia
  Tel. (+7) 495 777 6886
  Fax (+7) 495 777 6885

3. Renault – OAO “AVTOFRAMOS”.
  Russia, Moscow 109147, Vorontsovskaya ul., 35
  Tel/Fax: +7 (495) 775-48-48

4. The Taganrog Automobile Plant (TagAZ)
   Head office:
  2/2 Voroshilovsky prospekt, Rostov–on–Don, Russia, 344006
  Plant address:
  2 Instrumentalnaya st., Taganrog, Russia, 347923
  Tel: +7 (8634) 32 04 00
  Fax: +7 (8634) 31 81 57

5. OOO “General Motors Auto”
  General Motors CIS
  Gogolevsky blvd. 11
  9-th floor,
  119019 Moscow, Russia
  Tel. (+7) 495 777 6886

  Fax (+7) 495 777 6885

6. OOO „Volkswagen Group Rus“
  Moscow representative office

  Mrs Voden Anna
  Tel.: +7(499)272-1483

  Mr Panteleev Alexey
  Tel.: +7(499)271-3224

7. OOO “Nissan Motor Rus”

  Moscow representative office

  Moscow, Kosmodamianskaya nab., 52, build. 3

  Tel/Fax: +7(495) 961 21 31

                                   APPENDIX II

                 Contact list of major Russian car manufacturers

   Address: 36, Uzhnoye shosse, Togliatti, Samarskaya region, 445633 Russia
   Tel/Fax: +7 (8482) 73 82 43; +7(8482) 73 71 71

   Address: 17/2, build.1, Verkhneradichevskaya ul., Moscow 109004, RF
   Tel/Fax: +7 (495) 912 64 80; +7 (495) 912 50 19

3. GAZ
   Address: 88, Prospekt Lenina, Nizhny Novgorod, 603004 RF
   Tel/Fax: +7 (8312) 56 12 25

   Address: 5, Avtozavodskaya, Izhevsk, 426060 RF
   Tel/Fax: +7 (3412) 26 72 67; 26 58 52; 26 71 46

   Address: 30, Ulitsa Mira, Cherepovets, Vologodskaya region, 162600 RF
   Tel/Fax: +7 (8422) 40 60 38

                                      ANNEX III

          Contact list of Russian manufacturers of automotive components

Address: 1,2nd Shuiskaya st., Kineshma, Ivanovo region, Russia, 155800
Tel: +7(09331)23540, 57607, 57457
Fax: +7(09331)20765
Products manufactured: clutch systems, suspension systems, wheels and hubs,
braking systems, door locks and ignition systems

Address: 21, Salova st., Saint-Peterburg, Russia, 192102
Tel: +7(812)1128873
Products manufactured: car antennas, ignition switches and other switches, other
electrical and plastic components

Address: 79, Bolshaya Nizhegorodskaya st., Vladimir, Russia, 600016
Tel: +7(0922)324512, 210582, 297294
Fax: +7(0922)215237,297116
Products manufactured: Instrument clusters, windshield wiper systems, sensors,
thermostats, speedometers, tachometers, relays, other automotive electrical

Address: 6, Travyanaya st., Nizhny Novgorod, Russia, 603037
Tel: +7(8312)231243
Fax: +7(8312)231298
Products manufactured: floors, ceilings, trunk coverings, sound insulation panels

Address: Industrial Park on AvtoVAZ territory, Toliatti, Samara region, Russia,
Tel: +7(8482) 739420, 738749

Products manufactured: Fuel tanks, carpeting, window raisers, miscellaneous

Address: 40, Moscovsky ave, Cheboksary, Chuvashia, Russia, 428015
Tel: +7(8352) 491063, 491005
Products manufactured: Ignition systems, climate control systems, signal and
control systems

Address: 40, Morkvashinskaya st., Zhigulevsk, Samara region, Russia, 445350
Tel:+7 (8482)453975, (84862)61584
Products manufactured: Bumpers, bumper beams, stampings made from thin
sheet steel, plastic components, automated instruments and devices for
temperature pressure control.

Address: 25a, Bolshoy Pr. P.S, Saint-Petersburg, Russia, 197198
Tel: +7(812) 2321476
Fax:+7(812) 2324679
Products manufactured: Automotive body panel dies, other tooling for large-sized
stamping, stampings for automotive and other industries.

Address: 18, Azarovskaya st., Kaluga, Russia, 248631
Tel: +7(0842) 554318, 531044, 550575
Products manufactured: Electrical equipment

Address: 23a, 3rd Agregatnaya st., Kursk, Russia, 305022
Products manufactured: Engine bearings

Address: 6, Lomonosova st., Oryol, Russia 302000
Tel: +7(0862)410130, 416236
Fax:+7(0862) 416236
Products manufactured: Thermostats

Address: 13, Zheleznodorozhnaya st., Vyazniki, Vladimir region, Russia, 601446
Tel: +7(09233)23195
Products manufactured: Automotive lighting, internal lights, headlights, braking

Address: Promzona, Otradny, Samara region, Russia, 446300
Tel:+7 (84661) 23015
Products manufactured: Trunk rugs, floor mats

Address: 9, Kabelnaya st., Samara, Russia, 443022
Tel: +7(8482)282240
Products manufactured: Cables, car wiring.

Address: 11, Dzerzhinskogo st., Samara, Russia, 443093
Tel: +7(8462) 669007
Products manufactured: Auto wiring system, windshield washer systems, door
lock wiring.

Address: 54, Vatutina st., Stary Oskol, Belgorod region, Russia, 309530
Tel: +7(0725)29640, 224667
Products manufactured: Automotive electronics, injection systems, ignition

Address: 5, Shuvalovsky Proezd, Nizhny Novgorod, Russia, 603095
Tel: +7(8312)980408
Fax: +7(8312) 980437
Products manufactured: Polyurethane foam and plastic parts

Address: 5, Samoylova st., Saint-Petersburg, Russia, 19202
Tel: +7(812) 1667748, 1667237
Products manufactured: Fuel injection system elements, cooling systems pumps,
electromagnetic valves, gasoline pumps, carburetors

Address: 31, Gotvald st., Miass, Chelyabinsk region, Russia, 456306
Tel: +7(35135) 7603531
Products manufactured: Constant Velocity Joints (CV Joints), Tie Rods, Springs,
Shock Absorbers.

Address: 1, Sovetskaya st.,Zavolzhye-2, Nizhny Novgorod District, Russia,
Tel: +7 (83169)66842, 67257
Products manufactured: Gasoline and diesel engines, engine main bearings.

Address: 1, Yakovlev prospect, Cheboksary, Chuvashia, Russia,
Tel: +7(8352) 62870
Products manufactured: Controllers for fuel injected vehicles, vehicle antitheft
systems and diagnostic equipment for electronic systems

                                     ANNEX IV

          Contact list of Russian importers of automotive components

1. "Express Detali"
   Address: Moscow
   Tel/Fax: +7 495 7989895
   Product interest: Body parts, radiators, suspension

2. SpetsGruppServis
   Address: Moscow
   Contact: Mr Andrey Valeryevich Bayev/Marketing Director
   Tel/Fax: 7(495)9783809
   Product interest: Car parts for passenger cars:Toyota,
   CV: MAN, Mercedes. Interested in tires, electric parts, chassis, filters,
   starters, generators

3. France Group
   Address: Minsk, Belarus
   Tel/Fax: + 375(29)6167503; + 375(29)6202140
   Product interest: wholesaler and retailer for mechanical rubber products,
   electric parts, suspension

4. GS Oil
   Address: Moscow, 3-y Horoshevskiy,1
   Tel/Fax: 7(495)9921517
   Product interest: Interested in tires, electric parts, chassis, filters, starters,
5. Eksin
   Address: Moscow, Elektrodnaya, block 3, bilding 2
   Tel/Fax: 7(495)7211742
   Product interest: Starters, generators and their components

6. Autojest
   Address: Saint-Petersburg
   Tel: 7(812)9833636
   Product interest: Equipment for spare parts production (brake blocks,
   discs, pads)

7. Prof-Intel
   Address: Moscow
   Tel: 7(909)9501150
   Product interest: Spare parts for cars of Chinese and Korean origin

8. Himpromtorg
   Address: Kotelniki, MO, Russia
   Tel/Fax: 7(499)9404345
   Product interest: Mechanical rubber products, manufactured goods

9. Korona (group of companies)
   Address: Saint-Petersburg, Russia
   Tel/Fax: 7(812)3310884
   Product interest: components for commercial vehicles

10. Optima Trading
   Address: Moscow, Kashirskoye sh.,8 str.4
   Tel/Fax: 7(495)9213774, 7835826
   Product interest: Car accessories

11. DorTrans
   Address: Moscow, Kravchenko st., 4 bld 2
   Tel/Fax: 7(495)7464048; 7(495)981860

   Product interest: spare parts for Japanese, Korean, Chinese trucks

   Address: Moscow
   Tel/Fax: 7(495)7272862
   Product interest: Equipment, spare parts

13. Autospar
   Address: Moscow
   Tel/Fax: 7(495)9888425; 7(495)7451574
   Product interest: Wide range of products (Chassis, etc.)

14. Nik
   Address: Zhukovsky, Moscow region
   Tel/Fax: 7(916)9510842
   Product interest: Wide range of products

15. Vostok-Zapad Plus
   Address: Reutov, Russia
   Tel/Fax: 7(926)8655807
   Product interest: shock absorbers for wide range of cars

16. Avtoreal
   Address: Kirov, Russia
   Tel/Fax: 7(332)522727,255555
   Product interest: Wide range of auto components

17. Magistral
   Address: Moscow
   Tel/Fax: 7(903)7571047
   Product interest: High-voltage cables, other parts

18. Brake
   Address: Minsk, Belarus
   Tel/Fax: (375 17)2964710; (375 17)2854871
   Product interest: brake systems


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