BRIC nations including Brazil, Russia, India and China are proving to be the best bet for auto manufacturers around the world. European, Japanese, Korean and American auto makers are flocking in droves to these emerging markets to tie-up with local players or set up their own independent shops. While most of these car makers in India have their own brand set up in the country, Russia and China are sees a lot of joint ventures and local partnerships in their markets.
In China, auto makers essentially need to have a Chinese partner in order to set up shop. As per the new norms any auto maker intending to produce eco friendly new cars like electric vehicles, hybrid models, etc. need to share their technical know-how with their local partners if they intend to sell their brands. This is a Hobson’s choice for every car marker as China is too large to ignore and world’s largest car market.
Russian automaker GAZ led under industrial tycoon Oleg Deripaska is still the single largest player in the country operating independently and selling its cars under the brand “Gazel”. Another Russian player Autovaz has entered into a strategic alliance with French auto maker Renault to develop more robust strategy for being a global player. Now as Russian automakers have been hit hard by worst recession in past 15 years, GAZ is also seeking international partners to strengthen its presence.
This seems to be a win-win situation for both as global automakers are keen to set up assembly lines owing to the large potential profit and tax breaks on locally produced vehicles. GAZ is thus planning to partner with Volkswagen and the German automaker plans to produce 150,000 units in Nizhny Novgorod. Volkswagen already has its plant in Kaluga. Similarly, Hyundai’s plans are already underway to set up new plant in St. Petersburg.
