OREANDA-NEWS. August 30, 2012. Russia became a member of the World Trade Organization. It is an important day for the Russian economy and for the Russian automotive industry which will have to adapt to new market conditions. In live interviews to BBC and Bloomberg ТV Bo Andersson, the President/CEO of GAZ Group, commented on the implications of Russia’s WTO accession for Russian automakers, reported the press-centre of GAZ. 

For the Russian automotive industry accession to the WTO would bring both challenges and opportunities, said the President of GAZ Group: “First, competition will come in. Russia is a huge market, so foreign direct investment will be attracted. We’ll have more transparency”. According to the experts, Russia is the second largest market in Europe. “It is very clear that Russia will be the largest market in Europe. If you take today, there are 283 vehicles per 1,000 people in Russia, and in the UK there are 583, so Russia will continue to grow”, said Bo Andersson.

GAZ Group, the Russia’s largest commercial vehicle manufacturer, remains focused on its four core segments: trucks, buses, LCVs and passenger cars. According to GAZ Group’s estimate, the LCV segment of the market is going to take a hit regarding import duties, the other three are likely to stay intact for the next six-seven years. GAZ will have to adapt its strategy to meet new challenges and use new opportunities in order to remain the leader in the Russian market. “I see that we have challenges”, commented Bo Andersson. “We will have lower prices, we will have lower margins. On the other hand, it’s the opportunities”, in particular, reduction of duties for imported automotive components installed on GAZ Group’s vehicles.

Russia’s accession to the WTO can also open up new opportunities in foreign markets for Russian manufactures: “The technology standards will also harmonize with the rest of the world and that means it is easier to export. We have opportunities to go into India, we are already in Latin America, we are in some of the countries in Africa”, said Bo Andersson.

GAZ Group has all the potential needed to meet the challenges of the open market: ”We have 1.8 million customers that are driving our vehicles, we need to keep them, and we have the largest distribution system in Russia”, he remarked. The last, but not the least important area is partnerships with the leading foreign manufacturers: “Our job is to make sure GAZ is the best partner in Russia and that’s what we do every day”.