From Bloomberg this morning:
Volkswagen AG, Europe's largest carmaker, opened a Russian factory today as it seeks to triple its share of the country's market over the next three years and joins rivals Ford Motor Co. and Renault SA in beginning production in one of the fastest growing car markets.
``With the start of assembly in our new plant, the Volkswagen group has definitely arrived in the Russian market, which has a lot of future potential,'' Chief Executive Martin Winterkorn said at the factory's inauguration in Kaluga, 160 kilometers (99 miles) southwest of Moscow.
Volkswagen, based in Wolfsburg, Germany, plans to increase its share of the Russian market to 10 percent in 2010 from 3 percent currently. The country is an important growth market for automakers as Russians spent a record $16 billion on new foreign cars in the first half as rising incomes fuel demand, according to PricewaterhouseCoopers LLP.
``Local production should help Volkswagen gain more market share, primarily because avoiding the 25 percent import tariff will make it more price competitive,'' said Michael Tyndall, an industry analyst with Nomura Securities in London who has a ``buy'' rating on Volkswagen shares. Volkswagen's market share in Russia is ``too low given its share of the global market.''
Russia's oil-fueled economy, which the government forecasts will grow 7.3 percent this year, is expanding for the ninth year. Ten-month foreign car sales in Russia surged 64 percent to 1.31 million vehicles. Ford, the world's third-largest carmaker, is spending $100 million to expand capacity at a St. Petersburg plant by almost 75 percent over the next two years. Renault, France's second-largest automaker, opened a $250 million Moscow plant in 2005.
General Motors, Toyota
General Motors Corp., the world's biggest carmaker, is building a factory on the outskirts of St. Petersburg that will produce 70,000 cars a year, while Toyota Motor Corp., the world's second-largest carmaker, is investing more than $150 million in a Russian plant.
Volkswagen will build 66,000 cars at the plant this year and plans to eventually assemble 150,000 vehicles at the factory. The carmaker will start by building the Passat midsized sedan and the Skoda Octavia at the plant, then expand production to the Skoda Fabia and a Volkswagen brand small car developed for the Russian market. All the cars will be sold for under 10,000 euros ($14,811).
The Russian expansion is part of Winterkorn's global to increase sales to 8 million vehicles worldwide by 2010 and challenge Toyota, the world's second-largest carmaker. Volkswagen, the world's fourth-largest carmaker, last night in Moscow raised its sales target for this year to a record 6.2 million vehicles from ``more than'' 6 million previously.
Russia, India
Winterkorn plans to invest 28.9 billion euros over the next three years to develop the new models, build the plant in Russia and also open a factory in India.
The Volkswagen brand currently ranks 14th in Russian car sales, while Skoda is 16th. Along with the new factory, the carmaker plans to expand its Russian dealer network. During this first phase of production, Volkswagen will assemble cars from kits, with full-scale assembly starting in the first half of 2009. The carmaker will invest a total of 500 million euros at the plant, which will eventually employ 3,000 people.
GM has a joint venture with OAO AvtoVAZ, Russia's biggest carmaker, making Chevrolet Niva small sport-utility vehicles, and licenses production of other models through Avtotor, a third-party assembler, in the Russian exclave of Kaliningrad.
GM said earlier this month that it may also build Adam Opel AG cars in Russia in the future as demand for the brand surges in the country. Russia is likely to become Opel's biggest market, overtaking Germany, the division's home country, GM Europe President Carl-Peter Forster said last month.
PSA Peugeot Citroen, Europe's second-biggest carmaker, has said it will choose a factory site in Russia before year's end. Peugeot now has ``two or three'' locations to choose from, Chief Executive Officer Christian Streiff said in September.
Wednesday, November 28, 2007
Thursday, November 22, 2007
Russian Inflation October 2007
From Bloomberg this morning:
Russia's inflation rate rose to 10.8 percent in October, the highest level since February last year, as oil and food prices advanced.
The rate increased from 9.4 percent in September, the Moscow-based Federal Statistics Service said in an e-mailed statement today. The result exceeded a median estimate of 10.6 percent by 21 economists in a Bloomberg survey. Prices rose a monthly 1.6 percent in October.
Russia, the world's biggest energy exporter, has struggled to slow inflation to western European levels as money from oil and gas sales flood the country and global food prices increase. The government registered single-digit annual price growth of 9 percent for the first time last year.
``Very high monetary expansion,'' due to increased oil prices and foreign investment, have pushed up inflation, Vladimir Osakovsky, an economist at Moscow-based Aton Capital, said before today's report. ``External shocks,'' in the form of rising global food prices, also played a role, he said.
The inflation rate won't drop ``significantly'' in the next one or two months because of increasing wages and rising global food prices, central bank Deputy Chairman Konstantin Korishchenko said on Nov. 15.
In a bid to rein in prices, the government has approved lower import duties on dairy and vegetable oil, sold some grain from the state reserves and instituted an export duty on grain to keep the commodity in Russia.
Food prices account for more than a third of the Russian consumer-price index, the UralSib Financial Corp. investment bank said. Most Russians spend more than half their household income on food, according to the state-run Center for the Study of Public Opinion.
also this today from Bloomberg:
Russian consumer prices may grow between an annual 11 percent and 11.5 percent in 2007, the Economy Ministry said.
Inflation in November could fall to between 0.8 percent and 1 percent, the ministry said in a report released today. Prices jumped a monthly 1.6 percent in October, the most since January, as food prices advanced, according to the Federal Statistics Service.
Russia, the world's biggest energy exporter, has struggled to lower inflation as revenue from oil and gas sales flood the country and global food costs rise. The government sought to slow inflation to 8 percent this year from 9 percent in 2006.
Russia's inflation rate rose to 10.8 percent in October, the highest level since February last year, as oil and food prices advanced.
The rate increased from 9.4 percent in September, the Moscow-based Federal Statistics Service said in an e-mailed statement today. The result exceeded a median estimate of 10.6 percent by 21 economists in a Bloomberg survey. Prices rose a monthly 1.6 percent in October.
Russia, the world's biggest energy exporter, has struggled to slow inflation to western European levels as money from oil and gas sales flood the country and global food prices increase. The government registered single-digit annual price growth of 9 percent for the first time last year.
``Very high monetary expansion,'' due to increased oil prices and foreign investment, have pushed up inflation, Vladimir Osakovsky, an economist at Moscow-based Aton Capital, said before today's report. ``External shocks,'' in the form of rising global food prices, also played a role, he said.
The inflation rate won't drop ``significantly'' in the next one or two months because of increasing wages and rising global food prices, central bank Deputy Chairman Konstantin Korishchenko said on Nov. 15.
In a bid to rein in prices, the government has approved lower import duties on dairy and vegetable oil, sold some grain from the state reserves and instituted an export duty on grain to keep the commodity in Russia.
Food prices account for more than a third of the Russian consumer-price index, the UralSib Financial Corp. investment bank said. Most Russians spend more than half their household income on food, according to the state-run Center for the Study of Public Opinion.
also this today from Bloomberg:
Russian consumer prices may grow between an annual 11 percent and 11.5 percent in 2007, the Economy Ministry said.
Inflation in November could fall to between 0.8 percent and 1 percent, the ministry said in a report released today. Prices jumped a monthly 1.6 percent in October, the most since January, as food prices advanced, according to the Federal Statistics Service.
Russia, the world's biggest energy exporter, has struggled to lower inflation as revenue from oil and gas sales flood the country and global food costs rise. The government sought to slow inflation to 8 percent this year from 9 percent in 2006.
Monday, November 19, 2007
Inflation in Russia
Inflation in Russia in 2007 could exceed 11%, the director of the Economic Development and Trade Ministry’s macroeconomic forecasting department said Thursday.
Andrei Klepach told journalists that originally, inflation in 2007 was expected to reach 8% attributing the rise to structural factors like price hikes in staple foods, as well as monetary factors. Klepach said inflation in 2008 could exceed the 6-7% forecast. “We are currently specifying the inflation forecast for 2008. It looks like we won’t be within 6-7%,” he said. The ministry official also said the Russian government could restrict grain exports in 2008 to curb inflation. “We may impose a direct ban or introduce an export duty,” Klepach said adding that measures will depend on the market situation. He said grain exports were 3 million metric tons in October and if this trend continues, the government will consider additional measures to restrict exports. According to the economics ministry forecast, GDP growth in 2007 will reach 7.3-7.4%.
Russian consumer prices rose more than expected in October as sunflower oil, dairy products and other foods became more expensive.
Prices rose a monthly 1.6 percent, the most since January, compared with 0.8 percent in September, the Moscow-based Federal Statistics Service said in an e-mailed statement today. The median forecast of 18 economists surveyed by Bloomberg was for a 1.4 percent increase.
Russia, the world's biggest energy exporter, has struggled to curb accelerating inflation as petrodollars flood the country and global food prices increase. The inflation rate may rise to 11 percent this year, surpassing the previous year's rate for the first time since 1998, according to the Economy Ministry.
``The rising costs of basic commodities can no longer be offset by resilient labor costs and soft commodities,'' UralSib Financial Corp. said in an e-mailed research note before the figures were released.
President Vladimir Putin and several ministers said last month the government will be unable to meet their goal of lowering the inflation rate to 8 percent this year from last year's 9 percent.
Food prices increased a monthly 3.3 percent in October, led by sunflower oil which increased 26 percent in the month, the service said. Dairy produce rose a monthly 9.6 percent.
Food Effect
``The Russian government has recently taken a number of measures to control prices on foodstuffs, given that they account for more than a third of Russian CPI index,'' UralSib said.
The government approved a lower import duty on dairy and vegetable oil, sold some grain from the state reserves and instituted an export duty on grain to keep the commodity in Russia to curb consumer-price growth.
Companies including OAO Wimm-Bill-Dann, Russia's biggest dairy producer, and X5 Retail Group NV agreed last month to freeze prices on some milk, vegetable oil, egg and bread products until Jan. 31.
The anti-inflationary measures slowed price growth in the last week of October, probably keeping inflation from spiking until next year, said Yaroslav Lissovolik, the chief economist at Deutsche Bank AG's Moscow office.
Ruble Strength
The central bank may allow the ruble to strengthen at the end of this year or in the first quarter of 2008 to slow price growth, he said.
``The increase in government spending, which will improve the situation with liquidity, will place the central bank in a better position'' to use the ruble as an anti-inflationary tool, Lissovolik said.
Most Russians spend more than half their household income on food, according to the state-run Center for the Study of Public Opinion. Another 29 percent spend at least a quarter of their income on food, according to a survey released on Oct. 31.
Consumer prices increased 9.3 percent in January through October, compared with 7.5 percent in the first 10 months of last year, according to the statistics office.
Andrei Klepach told journalists that originally, inflation in 2007 was expected to reach 8% attributing the rise to structural factors like price hikes in staple foods, as well as monetary factors. Klepach said inflation in 2008 could exceed the 6-7% forecast. “We are currently specifying the inflation forecast for 2008. It looks like we won’t be within 6-7%,” he said. The ministry official also said the Russian government could restrict grain exports in 2008 to curb inflation. “We may impose a direct ban or introduce an export duty,” Klepach said adding that measures will depend on the market situation. He said grain exports were 3 million metric tons in October and if this trend continues, the government will consider additional measures to restrict exports. According to the economics ministry forecast, GDP growth in 2007 will reach 7.3-7.4%.
Russian consumer prices rose more than expected in October as sunflower oil, dairy products and other foods became more expensive.
Prices rose a monthly 1.6 percent, the most since January, compared with 0.8 percent in September, the Moscow-based Federal Statistics Service said in an e-mailed statement today. The median forecast of 18 economists surveyed by Bloomberg was for a 1.4 percent increase.
Russia, the world's biggest energy exporter, has struggled to curb accelerating inflation as petrodollars flood the country and global food prices increase. The inflation rate may rise to 11 percent this year, surpassing the previous year's rate for the first time since 1998, according to the Economy Ministry.
``The rising costs of basic commodities can no longer be offset by resilient labor costs and soft commodities,'' UralSib Financial Corp. said in an e-mailed research note before the figures were released.
President Vladimir Putin and several ministers said last month the government will be unable to meet their goal of lowering the inflation rate to 8 percent this year from last year's 9 percent.
Food prices increased a monthly 3.3 percent in October, led by sunflower oil which increased 26 percent in the month, the service said. Dairy produce rose a monthly 9.6 percent.
Food Effect
``The Russian government has recently taken a number of measures to control prices on foodstuffs, given that they account for more than a third of Russian CPI index,'' UralSib said.
The government approved a lower import duty on dairy and vegetable oil, sold some grain from the state reserves and instituted an export duty on grain to keep the commodity in Russia to curb consumer-price growth.
Companies including OAO Wimm-Bill-Dann, Russia's biggest dairy producer, and X5 Retail Group NV agreed last month to freeze prices on some milk, vegetable oil, egg and bread products until Jan. 31.
The anti-inflationary measures slowed price growth in the last week of October, probably keeping inflation from spiking until next year, said Yaroslav Lissovolik, the chief economist at Deutsche Bank AG's Moscow office.
Ruble Strength
The central bank may allow the ruble to strengthen at the end of this year or in the first quarter of 2008 to slow price growth, he said.
``The increase in government spending, which will improve the situation with liquidity, will place the central bank in a better position'' to use the ruble as an anti-inflationary tool, Lissovolik said.
Most Russians spend more than half their household income on food, according to the state-run Center for the Study of Public Opinion. Another 29 percent spend at least a quarter of their income on food, according to a survey released on Oct. 31.
Consumer prices increased 9.3 percent in January through October, compared with 7.5 percent in the first 10 months of last year, according to the statistics office.
Russian Industrial Output October 2007
From Bloomberg today:
Russian industrial production growth accelerated in October as output of construction cranes and other manufactured goods increased.
Output grew an annual 6.1 percent, compared with 3 percent in September, the slowest pace this year, the Moscow-based Federal Statistics Service said in an e-mail today. The performance confirms comments last week by the Economy Minister's chief forecaster Andrei Klepach and was above the 4.2 percent median estimate of 19 economists surveyed by Bloomberg.
The world's biggest exporter of crude oil and natural gas is trying to boost manufacturing and high-tech industries to become less dependent on revenue from energy sales. The government wants to double the size of the $1 trillion economy, the world's 10th biggest, by 2020.
In the month, output rose 7.4 percent, compared with a decline of 0.2 percent in September. Manufacturing expanded an annual 9 percent, up from 4 percent in the previous month.
Production of cranes on caterpillar tracks rose an annual 66.7 percent and industrial diesel locomotives rose 61.5 percent. Meat production was up 51.1 percent.
Electricity, gas and water output decreased an annual 0.1 percent, compared with an increase of 4.1 percent in September. Mining and quarrying grew 1.4 percent in October, faster than the 0.2 percent pace of the previous month.
Industrial output expanded 6.5 percent in the first 10 months compared with a year earlier.
Russian industrial production growth accelerated in October as output of construction cranes and other manufactured goods increased.
Output grew an annual 6.1 percent, compared with 3 percent in September, the slowest pace this year, the Moscow-based Federal Statistics Service said in an e-mail today. The performance confirms comments last week by the Economy Minister's chief forecaster Andrei Klepach and was above the 4.2 percent median estimate of 19 economists surveyed by Bloomberg.
The world's biggest exporter of crude oil and natural gas is trying to boost manufacturing and high-tech industries to become less dependent on revenue from energy sales. The government wants to double the size of the $1 trillion economy, the world's 10th biggest, by 2020.
In the month, output rose 7.4 percent, compared with a decline of 0.2 percent in September. Manufacturing expanded an annual 9 percent, up from 4 percent in the previous month.
Production of cranes on caterpillar tracks rose an annual 66.7 percent and industrial diesel locomotives rose 61.5 percent. Meat production was up 51.1 percent.
Electricity, gas and water output decreased an annual 0.1 percent, compared with an increase of 4.1 percent in September. Mining and quarrying grew 1.4 percent in October, faster than the 0.2 percent pace of the previous month.
Industrial output expanded 6.5 percent in the first 10 months compared with a year earlier.
Subscribe to:
Posts (Atom)
