- Aug 26, 2009
REPORT: Russian conglomorate plans merger of top three automotive brands
Kamaz Dakar rally team in Moscow's Red Square
While competition between local automakers may have worked in individual markets in the past, that same fragmentation is one of the chief elements hampering the global competitiveness of carmakers hailing from emerging markets. China's automakers have been learning that lesson for some time now, and Russia could be next if national conglomerate Russian Technologies has anything to say about it.
The industrial giant holds major interest in three of the country's biggest automotive companies – including 37.8 of automaker Avtovaz (Lada's parent company) and 30% of engine manufacturer Avtodizel – and it just recently announced preliminary plans to merge the three into a single holding firm called Rosavto.
Critics are already arguing that the limited synergies between the three will be outweighed by the increased bureaucracy. But while Russians may be resistant to conglomeration after decades of oppressively centrally-planned industry, it may be the one thing that could turn Russia's local auto industry around against the backdrop of plummeting sales and suspended production.
[Source: AFP | Image: NATALIA KOLESNIKOVA/AFP/Getty]