Mercedes sales

Daimler Gambles on Moscow Plant

mercedes
Mercedes is looking to beef up its operations in Moscow.
  • Why it matters

    Why it matters

    German carmakers have seen huge drops in sales in Russia this year, and a new government policy forcing state-owned companies to only buy goods made in Russia further adds to the pressure.

  • Facts

    Facts

    • The proposed plant will be able to produce 30,000 Mercedes a year, built from imported kits.
    • Daimler has been considering building a factory in Russia since 2000.
    • Overall car sales in Russia declined by almost 15 percent between January and May this year, to 548,119 vehicles.
  • Audio

    Audio

  • Pdf

The many Mercedes cars now cruising the streets of Moscow are one of the most potent symbols of Russia’s dramatic transition from bankrupt communism to Western consumerism. Yet when it came to building a Mercedes plant in the country, its parent company Daimler dithered.

Former executive board member Klaus Mangold made a promise to build such a factory in 2000, when he became chairman of the Committee on Eastern European Economic Relations. But by the time Mr. Mangold stepped down from the committee position in 2010, competitor BMW already had an auto assembly plant in Russia, while Daimler was still hesitating.

But now the company is on the verge of building an assembly plant in the country, Handelsblatt has learned from industry insiders.

It has apparently been decided already that the plant will be built in the Moscow vicinity, for a total investment of about €200 million ($224 million). Daimler is pinning its hopes on the East, despite an ongoing sales crisis in the Russian market.

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