REPORT: Russian conglomorate plans merger of top three automotive brands
Kamaz Dakar rally team in Moscow's Red SquareWhile 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 truckmaker Kamaz, 25% 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]
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Reader Comments (Page 1 of 1)
MachinaDC5 6:31PM (8/26/2009)
Finally Kamaz, Avtovaz, and Avtodizel are coming together. Let us celebrate their industrious behavior with Commissar Markov!
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Will 7:13PM (8/26/2009)
Maybe there are betters ways to pool resources than forming giant blobs. Maybe there could be third party R&D firms that license out their technologies, so the cost is spread out between many automakers, like how the Italian design firms design for multiple clients, and the results are generally superior to what automakers can do in-house. Managing a giant hierarchy of branches & departments is a surefire way end up with a pile of mediocrity.
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fizzandpop 7:41PM (8/26/2009)
Oh man, that sucks. Now when I buy an Avtovaz it will probably just be a badge-engineered Kamaz.
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Remy Overkempe 11:49PM (8/26/2009)
What's Renault's role in all of this? I mean, they do own 25% in Avtovaz with an option to expand to 50%.
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Rob 10:19AM (8/27/2009)
"decades of oppressively centrally-planned industry"
It sounds like what we in the USA are rushing headlong into.
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