Avtodom, the domestic dealership in Russia, has announced plans to start production at a former Mercedes-Benz plant in Moscow Region in collaboration with new partners in 2024. Denis Manturov, the Russian Deputy Prime Minister and trade and industry minister, revealed this information during the Army-2023 forum.
The production line at the factory will focus on assembling light vehicles, as it has been specifically designed for this category. Manturov expressed his optimism and hope for the agreements with the selected industrial partners to be finalized soon, leading to the commencement of production next year.
The opportunity for Avtodom arose when they purchased the Russian assets of Mercedes-Benz in April. The German automaker had to leave the country due to Ukraine-related sanctions. The purchase included the plant in Moscow Region and Mercedes-Benz Manufacturing Rus LLC, a car-leasing and insurance company. Additionally, Avtodom obtained the rights to provide maintenance services for Mercedes-Benz vehicles in Russia, including warranty and post-warranty support.
However, it was reported in the Izvestia newspaper that Mercedes-Benz has disconnected Russian dealers from its software. This action suspends the dealers’ access to online systems used for maintenance and problem identification. Mercedes-Benz halted manufacturing in Russia in early March the previous year, shortly after the military conflict in Ukraine began. Under pressure from Western sanctions that threatened its business operations in the country, the company announced its divestment from Russia in October.
Although Mercedes-Benz has relinquished its involvement in Russia for now, the German automaker secured a buyback option in its deal with the Russian government. This option gives the company the right to return and reclaim its business in Russia within six years.
In expanding its domestic production capabilities, Avtodom is taking advantage of the vacuum left by Mercedes-Benz’s departure. By partnering with new industrial players, they aim to fill the gap and meet the demand for light vehicles in Russia.
This move by Avtodom signifies a positive step towards strengthening the Russian automotive industry by utilizing existing manufacturing infrastructure. It also highlights the potential for domestic companies to take over and succeed in sectors previously dominated by international brands.
The collaboration between Avtodom and its new partners presents an ample opportunity to boost the local economy. The establishment of production facilities at the former Mercedes-Benz plant will create jobs, stimulate investment, and contribute to the growth of the automotive sector in Moscow Region.
As the negotiations between Avtodom and its industrial partners progress, there is growing anticipation for the start of production next year. With Mercedes-Benz’s assets in their possession, Avtodom is well-positioned to continue providing maintenance services for the German automaker’s vehicles in Russia.
In conclusion, Avtodom’s plans to commence assembly at the former Mercedes-Benz plant in Moscow Region with new partners in 2024 represent a significant development in the Russian automotive industry. This strategic move not only fills the void left by Mercedes-Benz but also demonstrates the potential for domestic players to take the lead in the sector. The collaboration between Avtodom and its industrial partners will contribute to economic growth and job creation in the country, further solidifying Russia’s position in the global automotive market.