Nissan Motor Co Japan's second-largest car maker, started building a $200 million car plant in St Petersburg on Sunday. Foreign car makers are streaming to Russia where the oil-fuelled economy is booming, and which may become Europe's biggest car market in 2011, according to recent market research from PricewaterhouseCoopers.
"This new plant in St Petersburg is not just cars for Russians, it's also new investment and new jobs," Russian First Deputy Prime Minister Sergei Ivanov said at the ground breaking ceremony in the industrial hub of Kamenka outside St Petersburg.
"Besides, the plant will work ... at a high level of localisation, which means it will use a high percentage of Russian-made car parts." At the initial stage of its first plant in Russia, to be launched by 2009, Nissan plans to produce 50,000 cars a year but output can be expanded with time, said Nissan Executive Vice President Carlos Tavares.
Nissan will assemble in Russia X-Trail off-road vehicles and Teana sedans, to be sold exclusively on the internal market.
"This is a significant step for Nissan in Russia," Tavares said through an interpreter. "Geographic expansion is very important to us."
PricewaterhouseCoopers forecast in a research last week that car sales in Russia would be worth $96 billion in 2011. The report found that imports of new foreign car units had grown by 60 percent in the first half of 2007 and of used cars by 46 percent. Sales of foreign cars assembled in Russia grew by 100 percent while sales of Russian brands dipped by 23 percent.
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