Expanded Russian Logistics Infrastructure
Russia's automotive industry is undergoing significant changes, with a focus on local production and logistics expansion. One of the key players in this shift is Rolf SCS, a logistics operator that recently entered a joint venture with NYK Line. This partnership is set to expand operations for ro-ro operations at Petrolesport and at the port of Zarubino in the Far East.
Rolf SCS experienced a 50% increase in transport volumes in 2012, reaching 248,000 vehicles, and expects a further increase of 20% to 300,000 vehicles in 2013. This growth is not limited to Rolf SCS alone, as other automakers such as Toyota are also expanding their operations in Russia. Toyota is looking for one more port hub in southern Russia in anticipation of increased imports from its Turkish plant in 2013.
Ust-Luga's Yug-2 terminal, a significant logistics hub, can store more than 18,200 units and has a customs post. Konstantin Sokolov, general manager at the Commercial Sea Port of Ust-Luga, anticipates local production to lead to significant export growth.
Ford Sollers, a joint venture between Ford and Sollers, is another player in this growing market. They distribute vehicles from plants in St Petersburg and in Elabuga, Tatarstan, to 120 dealerships. The ratio of local production to imports at Ford Sollers is 85:15. The average transport distance per vehicle within Russia for Ford Sollers is 1,540 kilometres.
The shift towards using Russian ports rather than foreign ports is a continuing trend. Toyota delivers 75% of its vehicles to dealers in Russia by truck and 25% by rail. Ford Sollers has reduced transport damages in its Russian distribution by four times, demonstrating the benefits of this approach.
This shift is in line with Russia's industrial policy, including Decree 166, which encourages local vehicle manufacturing and a reduction in imports as a percentage of the total volume. The proportion of locally produced new foreign brand cars has risen steadily in Russia, including from 54% in 2011 to 58% in 2012. Carmakers such as Volkswagen and Citroën have noted a decreasing proportion of imports.
Growing volume has also led to a doubling of rail volume for some OEMs in Russia. Rolf SCS, however, does not expect imports to grow from the current levels of 23% of its transport volumes. This suggests that while there is growth in the industry, it is largely driven by local production and distribution.
In addition to the expansion in southern Russia, Toyota will also open another hub in the Moscow region, which will receive the Sollers-produced Toyota Prado from its plant in Vladivostok. This move further underscores the growing importance of Russia's domestic logistics network.
Russia's new vehicle sales for 2012 are expected to finish 7-10% higher than 2011, at around 3 million units. This growth is likely to continue, driving further expansion and innovation in Russia's automotive logistics sector.
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