The Russian representative office of BMW explained to Motoru that the company does not completely abandon the idea of expanding local production in the country. However, negotiations on the construction of the site, which began back in 2018, were indeed suspended.
According to Stefan Toyhert, Director General of the BMW Group Russia, discussion of the construction of his own plant was suspended due to changes in legislation on special investment contracts (SPIC).
“The promising Russian market is one of the key for the BMW Group, so local production is important,” said Teichert. “The expansion of the presence of foreign business could bring additional revenue to the state budget and have a positive effect on the development of the economy.”
The new requirements made it virtually impossible to implement a project to create an assembly plant based on SPIC version 1.0. At the same time, changing the project parameters in accordance with the requirements of SPIK 2.0 would lead to its economic inexpediency.
The BMW representative said that “in the light of recent government decisions, the possibilities for integrating the future production of the Bavarian brand into the investment project of its partner Avtotor company have decreased. The company believes that it is necessary “to maintain a reasonable balance between locally produced and imported cars so as not to jeopardize the diversity of the model range.” The search for a suitable solution continues.
BMW cars have been assembled in Russia for more than 20 years. Currently, the production of cars is adjusted at the facilities of Avtotor, where they produce sedans of the 3rd, 5th and 7th series, as well as crossovers X1, X3, X4, X5 and X6. Russian-made cars account for about 60 percent of total sales. In 2019, BMW sold 41,520 new cars on the Russian market, which is 17 percent higher than in 2018.