Despite the global crisis in the automotive industry, the Russian automotive market provides manufacturers and parts suppliers with good prospects for the long term. The number of vehicles in Russia should continue to rise and is expected to triple to 90 million vehicles by 2020. One reason for this is the age of cars, with more than a third more than 20 years old. They will need to be replaced urgently. The government has provided fresh impetus to the Russian automotive industry by paying a scrapping premium since March 2010. Anyone scrapping an old car will receive 50,000 roubles from the state to buy a new one, provided the car is manufactured in Russia.
The Russian rubber industry has benefited in recent years from the great rise in demand for tyres in the domestic market and from traditionally strong exports. However, in mid-2008, the Russian automotive market collapsed. The introduction of the scrapping premium should boost new car sales. Russian and foreign companies are backing the market and investing locally. Experts are assuming that the markets will pick up noticeably from mid-2010 and are expecting considerable growth in the automotive and therefore also the tyre industry in the next five years. As most of Russia’s current plants have technologies from the 1950s and 1960s, and are unable to meet rising quality standards, Russia continues to be reliant on the import of modern machinery and equipment.
The demand for high-quality silicone rubbers should experience dynamic growth in the next few years and continue to provide western companies with market share in Russia. Silicone manufacturers of the latest generation of safety cables and truck parts expect fresh momentum. As silicone requires highly specialised industrial manufacturing, the demand from Russian processing companies for silicone rubber will be covered increasingly by imports, providing foreign companies with good sales opportunities.
The cautious investment behaviour of industry in general slowed down the construction industry in the difficult trading year 2009. There is a substantial backlog, because important investment projects were delayed or discontinued. Real prospects for the construction industry are opening up in infrastructure construction. In mid-2009, a new state holding company was established which will oversee the construction and operation of toll roads. Western European companies are represented in the construction and operator consortia of the new motorways. New projects are also expected in the area of power plant construction.