Avtotor is no longer receiving utilization fees for BMW cars, assembled according to the contract with the OEM in Kaliningrad. The German OEM is not ready to announce plans for increasing localization of production in Kaliningrad to return compensations.
It looks like for BMW it’s easier to raise final the price to compensate for a loss of subsidies, than to make local production deeper. Currently, Avtotor assembles X5, X6 and X7 in Kaliningrad. Sedan car assembly was shifted abroad last Spring.
PSR Analysis: The market size in Russia for BMW is very small. And it looks like that this niche BMW is lost to their colleagues from Mercedes, which establishes own production plant in Moscow region. PSR
Maxim Sakov is Market Consultant – Russia Operations for Power Systems Research
