The Russian government is poised to make huge cash injections into its moribund auto industry with the aim of making it globally competitive by 2015.
The sweeping plan calls for a massive £40bn investment over 10 years, of which the government will provide £3.6bn. The plan also calls for another £3.3bn to be provided by the state for the “purchase of foreign assets”.
Russian estimates suggest that the domestic industry will need as much as £14bn over the next decade simply to stay afloat and £7bn to re-equip its ageing factories.
According to a report in the Moscow Times, government officials describe the state of the car industry as “critical” and suggest it is “likely to disintegrate” within three to five years without a long-term rescue plan.
The internal report says Russian car technology is up to seven years behind the West and notes that Russia’s automotive components sector is “almost completely non-existent”.
It’s also estimated that Russian car workers are 50 to 75 per cent less efficient than the global industry best and that factory equipment is 60 per cent worn out.