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Government support for the industry р. 14

FACTS AND FIGURES 22. PCMA Rus LLC INFRASTRUCTURE 6. Kaluga Region 24. VOLVO GROUP Russia 42. Automotive Localization Opportunities 52. Skilled Personnel. AUTOMOTIVE CLUSTER INNOVATION-DRIVEN Alexey NIKITIN, Head of Training 10. Stages of Kaluga automobile PRODUCTION and Retraining Center for personnel in the automotive industry industry evolution 26. 30,000th Volvo car 28. 30 Automotive Component has been produced Manufacturers in Kaluga LOGISTICS 40. Cooperation 44. Innovative infrastructure for SUPPLIER PARK export development AUTOMOTIVE INDUSTRY 30. Continental Kaluga LLC Tire factory 12. Russian Car Market EXPORT In The 1st Half Of 2019 31. SMRC Automotive Technology Ru 46. Export form the Russian Federation 32. Faurecia Automotive GOVERNMENT SUPPORT Development LLC 47. Export form Kaluga Region 16. In June 2019, 34. Benteler the SPIC Commission supported Automotive LLC the projects of three Kaluga 35. YAPP Rus Automotive OPINION carmakers Systems LLC 48. From Patchwork to ITS 36. Severstal-Gonvarri- Ecosystem. Kaluga LLC OEM Anton ZHURAVLEV, 38. Mercator Digital Era of Transport 18. VOLKSWAGEN Group Rus LLC Kaluga LLC Association President Innovative Production Process 20. 39. Fuchs Oil LLC

PUBLISHED BY THE AGENCY FOR REGIONAL DEVELOPMENT OF KALUGA REGION SINCE 2010 PUBLICATION OF THE MINISTRY Editor Texts Design FOR ECONOMIC DEVELOPMENT Tatiana Antipova Andrew Bolshakov Rodion Nedorezov +7 (910) 609-74-21, +7 (915) 890-03-14, +7 (910) 606-00-50, OF KALUGA REGION [email protected] bolshakovandrew@ rodion-nedorezov@ All rights to information, photo materials and the logo of Kaluga list.ru yandex.ru Region belong to the Agency for Regional Development of ADVERTISING Kaluga Region: Elena Bochenkova Christina Tsurikova, Alina Abramova 41 bldg.2 Dzerzhinskogo St., Kaluga, 248001 Russia +7 (910) 915-00-58, +7 (910) 880-63-51, +7 (910) 606-91-93, Tel.: +7 (4842) 27-99-90, 27-99-91, arrko.ru [email protected] [email protected] [email protected] 4

Dear friends,

I am glad to welcome all approach Kaluga automotive cluster participants and guests of the consisting of 33 companies has been anniversary X International Forum developing successfully. AutoEvolution 2019. The share of the automotive Over the past decade the forum sector in Kaluga Region industrial has come a way from a specialized output has reached 34% in thirteen workshop to an international years. The export of vehicles platform where experts search and automotive components is for the automotive industry constantly increasing. development innovative models. The future automotive industry This year the forum agenda development in Russia depends on includes discussions on new further localization of automakers, transportation means development the ability to improve themselves, prospects and the formation of meet challenges and maintain intellectual transport infrastructure. their competitiveness in the global Furthermore, the attendees will try market. to find solutions to key problems I am convinced that the forum to support competitiveness of the attendees will propose many Russian automotive industry. breakthrough ideas to be supported It is not surprising that for and promoted, and the forum itself many years topics dedicated to will form the basis for improving improvement of the automotive business ties and an open dialog industry are discussed in hospitable between all stakeholders interested Kaluga Region. in the automotive industry We have accumulated vast development. experience in development of I wish to all attendees and guests innovative infrastructure, and of AutoEvolution 2019 successful creating conditions for competences work, new achievements and improvement and attraction of success. investments. Thanks to such

Anatoly ARTAMONOV Governor of Kaluga Region 5 6 Facts and Figures

KALUGA REGION GENERAL INFORMATION

TOTAL AREA:

29,800 sq km

0.17% of the Russian Federation territory Kaluga Kaluga Region is located in the center of the European part of Russia, south-westward of Moscow. It’s a part of the Central Federal District. The region borders with the City of Moscow, Moscow, Tula, Bryansk, Smolensk and Oryol Regions.

The distance from the border of Kaluga Region to Moscow (Moscow Ring Road) is 68 km.

POPULATION: INVESTMENTS:

1,009,400 0.69% 4th place st people live of the population of the 1 place in the CFD in the National rating of the and the 5th in the Russian in Kaluga Region Russian Federation investment climate state in Federation in terms of the the territory entities of the investments volume index in fixed Russian Federation (ASI) assets (January-March 2019)

2nd place 3rd place 210 114 investment high-tech production facilities in the CFD in the CFD projects commissioned since 2006 in terms by the average monthly of the aggregate birth wage level rate

GROSS REGIONAL INDUSTRY PRODUCT:

9% >40% GRP 1st place 1st place in the — GRP growth over produces the industrial the past five years sector in the CFD Russian Federation in terms of the industrial in terms of manufacturing output per capita output per capita Facts and Figures 7

INDUSTRIAL COMPLEX STRUCTURE

2.8% 2.5% Motor Vehicle Manufacturing 3.1% 3.3% Food Manufacturing 3.6% Computers, electronic and optical products manufacturing

4.1% 35.6% Metallurgical production Other non-metallic mineral products 7.1% manufacturing Fabricated metal products manufacturing

Medicines and materials used for medical purposes 9.9% production

Carbonite and petroleum products manufacturing

Other vehicles and equipment manufacturing 11.6% Rubber and plastic products manufacturing 16.4% Other

POINTS OF GROWTH (the 1st half of 2019)

127.6% 124.3% 118.7% transport means medicines and medical food production and equipment devices production manufacturing

113.3% 109.9% 3 times vehicle rubber and plastic carbonite and manufacturing products manufacturing petroleum products manufacturing

INNOVATION

2nd place in the 7th place in the Innovative Russian Federation Regions of the in terms of social and Russian Federation Vladimir PUTIN, economic conditions' rating - a group of President of the Russian development for innovative "strong innovators". Federation: activities (AIRR)

— Kaluga Region demonstrates convincing success, serves an example of harmonious, balanced development. The region is leading in the following areas: the number Tireless attention is paid not only to the creation of of researchers; R&D costs; share of knowledge-based modern industrial parks and to new factories and plants industries in GRP; the volume of attracted investment in opening, but also to environmental and nature protection the innovation sector per RUR1 million of the GRP. issues, to preserving the rich historical, cultural and spiritual heritage of the region. 8

Clusters

Kaluga Region was one of the first regions of Russia to choose the cluster approach as the main tool of sustainable economic development. Currently, most industrial enterprises, including traditional Kaluga and new investment industries, operate in the format of industry clusters. The advantages of this approach are obvious. For the region it means optimizing infrastructure costs. For business it is interesting Automotive because it offers the solutions for providing personnel, logistics, suppliers and sales markets, and Auto Components makes it possible to compete with large international Cluster concerns, to get a boost and reach a new competitive level. TOP 3 Russian car manufacturers

Pharmaceuticals, Biotechnology Transport and Biomedicine Cluster and Logistics Cluster

The only Silver Certificate CLUSTER EXCELLENCE (ESCA) The first multimodal logistic centers in Russia in the Russian Federation in Freight Village format

Agroindustry Composite and Ceramic Cluster Technology Cluster

1ST PLACE IN THE CFD AND 2ND IN RUSSIA 400 INNOVATIVE DEVELOPMENTS in terms of milk production and 4th in terms of livestock and passed along to production; participation in major poultry production for slaughter (in live weight) growth government programs 9

Electrical Appliances and Household Information and Communication Goods Production Cluster Technology Cluster

100% of Samsung TVs, monitors, washing Introduction of digital technologies machines sold in Russia are produced in all spheres of life in Kaluga Region

Metalworking Education cluster Cluster

228 FOUNDRY CASTING WORKS 100% training for the needs on one intermediate ladle — the world record of the economy 2019 from NLMK Kaluga. The heat time in Germany and the USA — 100 and 105

Tourist Food Processing and Recreation Cluster and Production Cluster

TOP 10 REGIONS OF RUSSIA Formed at the initiative of Nestle Purina PetCare. in terms of tourism development In the future – an inter-regional food cluster creation. 10 Automotive Cluster

Stages of Kaluga automobile industry evolution

The share of auto production in the industrial volume of the region:

0 % 1 % 31.5 % 34.3 %

2006 2007 2010 2019

Car industry share in the volume of tax payments from the region territory:

133.9% - vehicles production index for 2018 0.2 % 14.7 % 104.3% - for 7 months of 2019

2007 2019

Three Russian automakers 2019:

Avtovaz-Renault-Nissan Hyundai-KIA Group VW Group

— the share of production of the 0.1 % Kaluga automotive industry in the more than 11% — in 2019 Russian automotive industry in 2007 Automotive Cluster 11

KALUGA VEHICLE AND AUTO COMPONENTS MANUFACTURING CLUSTER 2019:

33 enterprises 3 OEMs – Volkswagen – PCMA – Volvo

30 automotive component manufacturers

1.7 million 108 thousand vehicles produced vehicles produced in Kaluga region since 2007 in 7 months 2019

78 thousand automobile internal combustion engines produced in 7 months of 2019

118 % production of vehicles for public utilities and road maintenance by LLC “Mercator Kaluga” growth

Vladimir POPOV, 112.9 % Deputy Governor of Kaluga Region: Volkswagen Group Rus LLC — We are open to cooperation within the and PCMA Rus LLC vehicle framework of the automotive cluster development. Overall vehicle production is growing. For the eight production growth months of this year, as many cars were produced as in 2017 as far as the terms of numbers of vehicle production in Kaluga Region are concerned. 12 Automotive Industry

Russian car market in the 1st half of 2019

THREE CAR MANUFACTURING CENTERS OF THE RUSSIAN FEDERATION *:

34% 23% 11.2% *АЕВ. VOLUME OF PASSENGER CARS PRODUCTION: 1.4 1.3 million units 1.2 1.2 million units million units million units 893 842 units

2015 2016 2017 2018 2019 (8 months)

Top 10 brands in the Russian market

Concern January-August 2019 January-August 2018 %

Lada 233 684 227 965 +3%

KIA 148 947 148 579 0%

Hyundai 116 180 115 578 +1%

Renault 89 153 92 896 -4%

Volkswagen Group 66 626 65 406 +2%

Toyota 65 406 66 579 -2%

Skoda 54 142 49 696 +9%

Nissan 41 257 50 106 -18%

GAZ comm 36 392 37 156 -2%

BMW 26 690 22 902 +17% Automotive Industry 13 Lada Granta

Victor PUSHKAREV, 1st place by sales lead analyst for 85,766 AUTOSTAT Agency, cars Candidate of science: — Forecasting passenger car market for 2019, we Top 20 Models have identified the following general factors of influence: Model January- January- % price rise for all goods August 2019 August 2018 and services, including automobiles, spare parts and 1 Lada Granta 85766 60250 42.4 car care, caused by higher VAT and RUR devaluation; 2 Lada Vesta 74050 67136 10.3 decline in the purchasing power of population due 3 KIA Rio 61591 67171 -8.3 to real incomes decrease and fiscal policy tightening; 4 Hyundai Creta 45561 43807 4.0 decline in economically 5 Hyundai Solaris 39882 44022 -9.4 employed population; longer car ownership and average 6 VW Polo 37028 37753 -1.9 annual level of oil prices. According to the forecast 7 Lada Largus 27826 28325 -1.8 baseline scenario, the 8 Renault Duster 24512 27863 -12.0 market for new passenger cars in 2019 will fall by 9 KIA Sportage 23005 22161 3.8 about 3%, i.e. up to 1.58 million cars. The optimistic 10 Skoda Rapid 22682 22606 0.3 version has suggested a slight increase - up to 3-4%, 11 VW Tiguan 22249 20185 10.2 and the pessimistic one - a 12 Toyota Camry 22072 19746 11.8 decline of up to 10%. Market indicators at the 13 Renault Logan 22004 21029 4.6 beginning of September demonstrate that the 14 Lada 4x4 20246 20631 -1.9 situation in the Russian vehicle market is developing 15 Toyota RAV 4 19597 19430 0.9 according to the baseline 16 Renault Sandero 19360 21220 -8.8 scenario. Moreover, at present, there is a good 17 Lada XRAY 18912 23317 -18.9 reason to believe that by the end of 2019 this trend will 18 Renault Kaptur 18037 20087 -10.2 continue, i.e. the market will show a fall of 3-4%. 19 KIA Optima 16818 12449 35.1

20 Skoda Octavia A7 15279 15627 -2.2 14 Acute News

Government support for the industry

SPIC

Until recently, Russian car assembly “critical technologies”. motors and electric energy plants operated in industrial Since the current year, the accumulators. assembly regime. Since 2018, the government support for the In other words, the government will Ministry of Industry and Trade of automotive industry will support only the investment projects Russia has developed an alternative be directed not at specific of manufacturers committed to version of a special investment manufacturers, but at certain implementing industrial products contract (SPIC) for the automotive innovative Russian-manufactured competitive on the global market. industry, which changes the terms products manufactured with The government, for its part, will of industrial assembly and invites the implementation of certain provide business with stable tax and companies to undertake obligations technological operations - pressing regulatory conditions and special to achieve a certain percentage of body parts, body welding and federal and regional incentive production localization level not in painting, production of gearboxes measures. For investors who enter monetary terms, but in the number and axle gearboxes (shafts, gears into a federal SPIC, a reduced tax of Russian-manufactured operations, and crankcases), engines (cylinder rate on corporate profits tax payable components and integral units, used blocks, cylinder heads, piston to the regional budget is set at in the automobile production. group, crankshafts), manufacture 10%, which allows this category of SPIC suggests developing uniform of regulating and motor testing investors to apply a zero tax rate on requirements for car components systems, transmissions, body corporate profits tax payable to the and automobile manufacturers, who electronics, safety and driver federal budget. have committed to use the Russian assistance systems, telematics products containing the so-called systems, production of electric

In 2019, all Kaluga car assembly plants entered into SPIC with the participation of the Russian Federation. Acute News 15

RSPIC

In addition to the federal SPIC, a mechanism Investors who enter into a regional of a special investment contract with the SPIC with a capital investment participation of Kaluga region (regional SPIC) is already being implemented in of over RUR3 billion have been Kaluga region. For investors whose capital granted the right to apply investments in the project amounted from property tax benefits established RUR300 million and who entered into a for investors engaged in priority regional SPIC, a reduced profit tax rate paid to the regional budget is set at 13.5% for the economic activities for Kaluga period until the benefit reaches 50% of capital Region. investment in the project.

IND

A legal framework for the application to zero, 5% is an obligatory minimum but the federal part of the tax can be of investment tax deduction (IND) has for payment to the subject's budget reduced to zero. been fully formed in Kaluga region. established by the Tax Code of the Russian Federation. The deduction can only be used in IND is not a privilege or a new type of The deduction of the federal part relation to the costs of fixed assets expenses; IND reduces the amount of the tax is 10% of the amount of attributed to 3-7 depreciation groups of tax to be paid to the federal and expenses for the acquisition and (or) (economic life from 3 to 20 years, regional budgets. The maximum reconstruction, modernization of fixed mainly production equipment and amount of the IND in relation to the assets. Minimum tax payment to the transport). regional component of the tax is 90% federal budget is not established, of the total cost of the acquisition and (or) reconstruction, modernization The positive side of IVP is direct savings on taxes. The amount of fixed assets (expenses accepted for deduction can be reduced by the of costs, which under other conditions would be written off decision of the subject). But it is not gradually, through depreciation, in this case, immediately possible to reduce the regional tax up reduces tax payments. 16 Government Support

In June 2019, the SPIC Commission supported the projects of three Kaluga carmakers

It was decided to support the projects of Volkswagen, PCMA Rus and Volvo at a meeting of the Interagency Commission on Special Investment Contracts (SPIC).

- Regarding the supported projects, within the electronic control units, elements of the body, framework of the SPIC it is planned to apply frame, chassis, exterior and interior parts, as the standard scope of trade preferences, which well as carrying out research and development includes guarantee of the unchanged regulatory works in Russia, pointed out Denis Manturov, and tax burden. Speaking of production the Minister of Industry and Trade of the Russian localization, we mean manufacturing all key Federation. vehicle components, including engine, gearbox,

Thus the Volkswagen Group Rus plans to The Interagency Commission has also approved implement a project to deepen the localization entering into a special investment contract with of car models already time-tested in the PCMA Rus LLC, featuring the production of an Russian market: VW Polo, Skoda Rapid, Skoda engine with great export potential. According Octavia, Kodiak, Volkswagen Tiguan, Tarek. to the results of the project, the total share of Engine Production 1.6 MPI, 1.4 foreign sales in the company's revenue may amount to about 12%. TSI is planned with the following operations: pre-machining of the connecting rod and piston group, crankshaft, cylinder head and cylinder block. It is planned to use Russian- The projects that have gained the manufactured billets of the crankshaft, cylinder support will not only contribute block, cylinder head. The localization of the to a stable long-term growth gearbox and electronic vehicle control systems in car production, but will also is also suggested. provide an additional load for car component manufacturers. They are also consistent with the objectives of the Automotive Industry Development Strategies for the Period until 2025, and their implementation will ensure the attraction of more than RUR100 billion of private investment in the real sector of As part of the project, Volvo JSC localizes the economy. production of trucks. Government Support 17

Government support programs of the automotive industry will be extended for the year 2020

The Ministry of Industry and Trade reserve for car loans and leasing, vehicles) in Russia in 2019 could grow of the Russian Federation plans as we usually start at the beginning by a maximum of 1.5%. to extend the automotive industry of the year, but this still requires “The main task will be to maintain government support program for the additional approval procedures”, the same volume as the previous year 2020. Funds for them, said the said the Minister. The head of the year, the possible maximum will be head of the Ministry Denis Manturov Ministry of Industry and Trade has plus 1.5%”, the minister answered at Comtrans 2019 Exhibition, have also pointed out that the production the corresponding question. been already reserved. “So far, we of cars and LCVs (light commercial have reserved a small amount of funds that are now provided for in the draft budget. After the approval of The production of cars in Russia, according to the Federal State budgetary procedures is completed, Statistics Service, increased by 1.7% in the first half of 2019 it will be clear, for what measures exactly. I think that, first of all, there as compared to the indicator for the same period of 2018, and will be some minimum amount of amounted to 784 thousand vehicles.

The Government of the Russian Federation will allocate an additional RUR3 billion to support the automotive industry

The Government of Russia has allocated additional funds for pre- ferential leasing and lending programs in the automotive industry.

These programs, stated the Earlier this year, the Ministry of Prime Minister Dmitry Medvedev, Industry and Trade of the Russian are becoming increasingly Federation allocated RUR10.4 popular. “In particular, we are billion for support programs for talking about the allocation automobile market, which is of additional RUR3 billion almost three times less than in from the reserves to support 2018. Already in June, additional preferential leasing and lending RUR20 billion was requested for in the automotive industry. Such targeted programs to stimulate Denis MANTUROV, programs for buying passenger demand for passenger and Minister of Industry cars, light trucks and tractors are commercial cars. The Ministry and Trade of the increasingly in demand”, said the of Industry and Trade has Russian Federation: head of the Russian government. recently prepared a concept The Cabinet of Ministers expects of a development program for — We will continue that by the end of this year, the domestic high-tech production to create conditions allocated funds will help to get on of components and systems by necessary for both lease at least 2.3 thousand units automotive industry, according to domestic and foreign of wheeled vehicles and over which RUR150 billion of budget companies to feel comfortable in Russia. 22 thousand cars under lending funds will be spent to support programs. domestic producers until 2025.

Source: the Ministry of Trade and Industry of the Russian Federation press service 18 OEM

VOLKSWAGEN Group Rus LLC

Volkswagen implements 2 projects in Kaluga Region

01Automotive Plant 1,375 thousand cars produced since 2007

2009 Full-cycle 2017 2019 production launch VOLKSWAGEN 150.000th (Volkswagen Group Rus - the Škoda Rapid Tiguan and Škoda best exporter of produced Octavia cars) 2017

2007 2012 2018 2018 2018 Start of Production of the 500,000th The best performance Volume of exports amounted production 500,000th car Volkswagen indicators in the world to 20 000 cars. since the opening Polo produced among Volkswagen Export countries - Azerbaijan, of the plant plants - Transformer Belarus, Ukraine, Kazakhstan, of the Year award Moldova, Armenia, Czech Republic, Germany, India, China.

Markus OZEGOVIC, Volkswagen Group Rus CEO:

— In 2018, 200,000 Volkswagen and Škoda cars were produced at the Russian production sites of the company. This was made possible, partly owing to the effective work with local suppliers. Currently, we have more than 60 local suppliers in our portfolio who supply more than 5,500 types of components to our plants. OEM 19

Volkswagen Group Rus LLC produces Volkswagen Tiguan, Volkswagen Polo and Škoda Rapid models

02Engine Plant

The 1.6 MPI gasoline engine of EA211 series is the essence of the latest state-of-the-art technology in the engine industry that meets all the international standards of Volkswagen AG. At te Kaluga production facilities comprehensive quality control of products is exercised, numerous trials and tests are carried out. The engine fully complies with the Euro 5 environmental standard, The engine is which has a focus on 150 thousand available in two better environmental power options, protection from harmful engines / year 90 and 110 hp. emissions, and can be — working capacity installed on cars built on the MQB modular platform. Stefan DEPKA, Technical Director, Volkswagen Group Rus:

— 500,000 produced 2017 2019 engines is an More than 200 the 500,000th excellent indicator thousand engines of engine of 1.6 MPI that demonstrates the 1.6 MPI EA211 EA211 series the potential of local series were produced manufactured production and is the result of the impressive work of many specialists. 2015 We are constantly 2018 2018 Start of expanding our own 56.3% - increase 44,000 petrol engines of production of 1.6 production in Russia and in production the 1.6 MPI EA211 series MPI engines of supplying our customers volume. (161.000 delivered to various the EA211 series worldwide with the engines in 2018, production sites around highest quality products 103.000 in 2017) the world, including that meet the strictest factories in Spain standards. and Czech Republic 20 ОЕМ

Innovative Production Process

Logo Change: Step towards New Era in Automotive Industry

Volkswagen Group made an announcement on its corporate logo change at Frankfurt International Motor Show in mid-September 2019. The company abandoned its 3D logo and replaced it with a 2D one. The new logo introduction, according to Volkswagen, is connected with transition to a new automotive industry era, the era of electric vehicles. The global rebranding process will take two years. ОЕМ 21

LET’S GO 2025+: Strategy for Russia

Volkswagen Group Rus plant, located in Russia, has introduced a special local strategy named Let’s Go 2025+. The new strategy is to assist the company in becoming the best employer in Russia and manufacturing top quality cars. It also is to make Volkswagen the most efficient car producer in this country. The concept has already helped the company become the largest investor and employer in Kaluga Region. The company’s production facilities located in the region demonstrate record-breaking performance.

Tested.Genuine: original or counterfeited product?

Volkswagen Group Rus has launched a product marking program aimed at checking products’ authenticity. Starting from fall 2018 VW product packing has a two-layer sticker with the program logo, Tested.Genuine. Such stickers are used to mark certain spare parts, lubricants and liquids for Volkswagen, Audi, ŠKODA and Volkswagen Commercial Vehicles. 22 ОЕМ

PCMA Rus LLC

PCMA Rus Auto manufacturing plant

A joint project of PSA Peugeot Citroën (70%) and Mitsubishi Motors Corporation (30%).

2019: signing of a special investment contract with the Ministry of Industry and Trade of the Russian Federation and Kaluga Region. Within the framework of SPIC, it is planned to launch a new platform, to expand Nicolas FEBVE, General the car product range, in particular by Opel models, to localize a number Director of PCMA Rus of process operations, notably engine production LLC:

— The PCMA Rus plant is developing dynamically, 2018: launch of a new platform A project of locally manufactured for the production of Peugeot components export to France for developing efficient Expert, Peugeot Traveler, Citroen PSA Group factories industrial policy, investing Jumpy and Citroen SpaceTourer in supply chains in models Kaluga and strengthening production driven by new projects. This year we have signed the SPIC, and 2017: launch the production of renewed Peugeot 408 and Mitsubishi Pajero we are going to expand Sport models the range of PSA Group cars, for example start 2016: launch of new Citroen C4 Sedan the production of Opel, and continue to work on other projects. No doubt that the comprehensive 2012: full cycle production launch (SKD) support of Kaluga region contributes to the successful promotion of 2010: opening a plant in Kaluga (SKD mode) our projects. ОЕМ 23

>324,500 125,000 units / year ≈2,000 people cars produced since — maximum production — personnel 2010 capacity

Components Delivery by delivery by rail truck from from foreign Russian suppliers suppliers

car models have been 8 produced since 2019: Citroen C4 Citroen Space Tourer Citroen Jumpy Mitsubishi Outlander

Mitsubishi Pajero Sport Peugeot 408 Peugeot Traveller Peugeot Expert

On the basis of Peugeot Expert and Citroën Jumpy commercial Such PCMA Rus LLC vans, it is possible to develop vehicles as Peugeot passenger (8 + 1; 9 + 1) and 408, Citroen C4 cargo-passenger (4 + 1; 5 + 1) Sedan, Mitsubishi modifications, refrigerators, Outlander and armored collection vehicles, Mitsubishi Pajero mobile laboratories, and cars Sport participated - mobile social and ambulance in state demand services, etc. promotion programs (soft loan programs). 24 ОЕМ

VOLVO GROUP Russia

Volvo Truck Plant

2009 2009 2018

Start of The Ministry of Industry and Volvo cars entered the TOP-5 of production Trade of the Russian Federation the best-selling new trucks on the officially assigned the status of Russian market domestic to Volvo products

Volvo product range: Volvo FH, Volvo FM, Volvo FMX

• The Volvo Production • AO (N) Volvo Vostok • Today Volvo Vostok • A training center is System, based on was the first foreign Plant is the most modern operating at the enterprise the concept of lean manufacturer of trucks to enterprise in the Volvo on the ongoing basis to manufacturing, has been launch full-scale production Truck system in the world. continuously improve introduced at Volvo Vostok in the Russian Federation. professional skills and plant, and Volvo quality competencies of the system, based on the audit employees. of finished products, has been also used. ОЕМ 25

SERVICE CENTER VOLVO TRUCK CENTER KALUGA

2009 — opening

Production, sale and service on one site

CUSTOMS AND LOGISTICS COMPLEX VOLVO GROUP

2012 — opening 2,000 m2 55 — area of the vehicles per day customs control — average freight zone turnover

VOLVO GROUP FACTORY PRODUCING CABINS FOR VOLVO FREIGHT VEHICLES 2019 — entering into SPIC with 2014 — start of production the Ministry of Industry and Trade of the Russian Fede- • The company's • Volvo branded • 2018 – starting ration and Kaluga Region products are used truck service export of finished for the assembly center cabins to the Localization of industrial products of heavy trucks Volvo Group having no analogues in Russia, including under the Volvo factory in Ghent automated transmission for heavy brand (Belgium) commercial vehicles and trucks operating on liquefied natural gas. 26 Innovation-driven production

30,000th Volvo truck has been produced in Kaluga

In July 2019, the milestone 30.000th truck left the assembly line of the Volvo Group plant in Kaluga. It was a white Volvo FM long-haul truck with a 6x2 wheel arrangement, an 11-liter engine of 380 hp capacity and a day cabin. A RG-Techno refuse collector was installed on the vehicle for the further collection and removal of household waste. The 10.000th Volvo truck production was in winter 2013; the celebration of the 20.000th Volvo output was held in September 2017.

Volvo Trucks unveils XXL standard cabin for Volvo FH

To increase the efficiency and driving comfort on long-haul routes Volvo Trucks launches mass production of the Volvo FH with a 600-liter XXL cabin. The driver gets more space for personal items, comfortable sleep and free movement inside the cabin. 4 divisions of Volvo Company with the direct participation of Volvo Trucks consolidated their efforts in the development. As a result of close cooperation the cabin was created, tested and put into production in just 20 months. Innovation-driven production 27

Volvo LNG: long-haul truck operating on methane

Volvo Trucks has for the first time demonstrated long-haul truck Volvo FH LNG powered by liquefied natural gas (LNG) at Comtrans. The vehicle is intended for use in long hauls and regional transportation segments, for urban and suburban delivery operations. Equipped with a 13-liter in-line gas powered engine on the basis of a diesel analog, the truck has a two-channel nozzle to ensure simultaneous supply of gas and diesel fuel to the cylinder. In this case, diesel fuel is used only for igniting the fuel mix.

Volvo Vera — the future of autonomous electric means of transportation

For the first time in Russia, Volvo Trucks has presented its high-tech development in the field of electric autonomous and connected transport Vera within the framework of Comtrans international exhibition. The Vera electric robo-truck is designed for short-distance high frequency transportation of universal containers or large consignments. The development highlights Volvo leadership in transport industry innovative technologies of the nearest future. 28 Automotive cluster Automotive Component Manufacturers

seat kits and 30 electrical systems

sound insulation

Auto glass

engines

bumpers and front modules

lubricants Automotive cluster 29

plastic interior and exterior parts

metal seat exhaust systems frames and interior details (seats)

tires, auto electronics, air conditioning and power steering suspension elements

fuel tanks

dashboards, car wheels plastic door assembly panels 30 Supplier Park

Continental Kaluga LLC Tire Plant

2014 2018 1,000,000th 10,000,000th tire rolled tire production off the assembly line

2013 2015 2019 Production Export destinations For the second year in a row, start opening: Continental Kaluga has become 24 countries of the company leader in terms of Europe, Asia and product and process quality North America > 1,000 > 200 3 qualified tire brands: specialists items • Continental • Gislaved • Matador

Georgy ROTOV, Tire supply for all car Complete production cycle Continental Kaluga LLC assembly plants in Russia, from mix preparation to the Director General: except for Korean cars release of the final product — Our success is more than luck, it’s the result of production processes FLAGMAN MODELS standardization, brilliant teamwork, constant training of employees EcoContact 6 IceContact 3 PremiumContact 6 and flexible reaction to — using the innovative — with rubber covered — premium changes. Green Chili rubber studs tires compound Supplier Park 31

SMRC Automotive Technology Ru

SMRC Automotive Technology Ru LLC (a division of Motherson) has been operating in Kaluga since 2010

Anton NECHIPORENKO, SMRK Automotive Technology Ru LLC plant in Kaluga Director General:

— 2019 is the year of historically important changes for the enterprise. First of all, it is very important that our clients trust us and provide the opportunity of cooperation, and the parent company invests in the development of the The enterprise specializes in and implement the acquired skills business in Russia. These production and supply of car among their co-workers. are the necessary conditions dashboards, door trim, side racks, In 2019–2020 the Kaluga plant is for economic growth, boot racks and other plastic auto going to launch 3 new projects, it development of technologies, components to assembly lines of is updating the entire product line, and improvement of working auto manufacturers. Every year, the constructing a new office and the 3rd conditions. Secondly, plant ships more than 130 thousand line of production workshop, which elaborate project tasks and car sets as a finished product to car will increase the facilities by 1.500 m2. the new construction are the assembly plants in Russia, the CIS The cumulative investment in the new challenges that immediately countries, Mexico and Brazil. Today, projects is more than 10 million euros. reveal both the strong points the main customers of the plant are of the team and the areas for Volkswagen Group Rus and Renault growth. Today we can clearly see which areas we need to Russia. Employees are trained at improve. We are confident foreign manufacturers of equipment that our team is on the right track: we are committed to high quality standards, wish to 100% fulfill obligations to customers, to support innovation and to maintain In 2019, an automation program was launched at the discipline in the workplace. We are characterized by a plant testing a cobot — a collaborative robot that conscious approach to costs, care for the well-being and interacts with a person and releases an operator from development of employees - manual assembly functions. all these things are the basis of our success in the present and future. 32 Supplier Park

Faurecia Automotive Development LLC

Faurecia has two production sites Nowadays Faurecia is carrying out in Kaluga. Since 2010, Faurecia innovation-driven development in Emissions Control Technologies plant the field of environmentally friendly has specialized in exhaust systems automotive solutions and optimization manufacturing. Faurecia Interior of automotive components weight has been manufacturing interior to increase fuel economy and components since 2012. The company individualize cars. The company works closely with its customers and has launched a social project in global partners such as Volkswagen, cooperation with Kaluga rehabilitation PSA, Nissan, Renault, Mitsubishi, and educational complex to help Mercedes. people with disabilities.

Gestamp-Severstal-Kaluga LLC

Gestamp-Severstal-Kaluga LLC is Automatic and semi-automatic electric a Spanish-Russian joint venture. It arc welding in protection gases, contact produces external and internal body welding, as well as the technology parts: sidewalls, roofs, doors, hoods, of roller expander and applying seal trunk lids, crossbars for instrument for assembly were introduced into panels and other components for the production. Kaluga is one of the largest best-selling cars manufactured in Gestamp cold pressing plants in Europe. Russia. Рубрика 33 34 Supplier Park

Benteler Automotive LLC

Benteler Automotive LLC is a German cold stamping, automated assembly, MAG industrial company operating in the field welding, painting and 3D measurement. of automotive equipment, steel and pipe production. Benteler Automotive plant in Kaluga is Kaluga enterprise specializes in automotive the first in Russia and the 69th enterprise components (suspension parts) production of BENTELER in the world. with the use of modern technologies such as

MAGNA Automotive Rus JSC Branch

Magna is a global supplier of automotive com- The customers of the plant are Volkswagen ponents with 317 industrial sites, 102 centers Group Rus LLC, PCMA Rus LLC, Autoframos for product development, engineering and sales OJSC and other car manufacturers. In 2016, the in 29 countries. Kaluga branch of Magna Auto- team of Kaluga Magna Automotive Rus Branch motive Rus JSC was officially opened in 2010. received the Employer of the Year 2016 award The company specializes in casting, painting, in industrial production and took the 2nd place assembling and supplying JIS on lines. The main in the region. In 2019, Kaluga Magna plant won products of the company are bumpers, front the nomination Digital Technologies in Human module assembly, radiator grilles assembly, Resources. radiator frames and small plastic parts for cars. Supplier Park 35

YAPP Rus Automotive Systems LLC

YAPP Rus Automotive Systems specializes in plastic fuel tanks production. The plant of the Chinese company YAPP has been operating in Kaluga since 2009. The company successfully cooperates with Russian manufacturers - Volkswagen Group Rus LLC, PCMA Rus LLC, Mercedes-Benz RUS CJSC and others.

ZHU Aigo, YAPP Rus Automotive Systems LLC Products certified Director General: according > 500,000 — Our tasks are reflected units / year to European in YAPP's corporate motto: standards “To be a leader in the global — productive capacity market for automotive fuel systems”. We intend to increase the share of tanks produced on Kaluga land in the Russian market. We are currently negotiating with our regular customers, discussing potential cooperation with factories of the CIS countries and Russian manufacturers of commercial and agricultural machinery.

Fuyao Glass Rus LLC

Fuyao Glass Rus LLC is the largest foreign project of the Chinese FUYAO concern.

The factory produces a wide range of glass products for cars and trucks. Among the innovation- driven developments there is multi-function glass with heating, energy-saving glass (LOW-E), soundproof glass, and solar glass. The enterprise manufactures products that meet international quality and safety requirements for such automotive companies as Volkswagen, Hyundai, Nissan, Renault, Volvo and GAZ, located in various Russian regions. Kaluga plant products are delivered to Spain, UK, France, Belgium, Italy, Turkey, and Poland for Volkswagen, Audi, and General Motors enterprises. 36 Supplier Park

Severstal-Gonvarri-Kaluga LLC

Severstal-Gonvarri-Kaluga LLC is a joint Russian-Spanish venture formed by Severstal and Gonvarri companies.

170,000 tons of metal / year – capacity

All the production is carried out on high-quality modern FAGOR equipment, ensuring the highest quality products. Severstal-Gonvarry- Kaluga provides a full range of services for the longitudinal and transverse slighting of metal rolling, cutting rolled steel into strips, and blank-cutting for stamping.

The service metal center in Kaluga Region has been operating since 2010.

HP Pelzer Rus LLC

HP Pelzer Rus LLC is a supplier of sound insulation components for enterprises of the Kaluga auto cluster 2009 and Russian automobile manufacturers. Production of interior parts for the VW Polo project

2014 Details for VW Tiguan and Jetta (Nizhny Novgorod), as well as Skoda Rapid, Octavia, Yeti

2015 Parts for Toyota (Camry), Mitsubishi (Pajero, Outlander), Peugeot (308), Citroën (C4), Daimler (Sprinter) Business 37

Ways to Cut Down Expenses 5 for Cleaning in Production Method#1 Method#4 Cleaning 911 company has CONTROL STUFF CORRECTLY USE DETERGENTS been working in the B2B Lack of control is the first thing we face in DETERGENTS should be professional. In brief segment for more than 10 large enterprises. Yes, there are cleaners with on the benefits, due to concentration and years. During this time, work schedules, check marks and signatures. composition a right detergent is consumed more we have distinguished But most often there is no real quality control slowly and economically. So you don’t have to one important trend: most behind a piece of paper. spend much on bottles with a “duckling” and enterprises do not think Cleaned badly? If one of the employees notices other popular, but not very effective stuff. about cleaning arrangements. this, he or she is unlikely to tell the management (only if the dirt remains systematically). If They start searching for management notices this, the cleaners will Method#5 economically advantageous certainly be reprimanded, but the verification REDISTRIBUTE EMPLOYEES variant of cleaning only when of cleanliness is unlikely to become systematic. Sometimes it happens: people get sick, go on the budgets and staff are What’s the threat? One may not pay attention vacation, quit, or simply stop going to work. Not overblown, but the result to the ethical matter, but the hack work of to let such a situation to become the collapse does not make them happy. cleaners, for example in food production, can of the cleanliness system at your facility, At the same time, they lead to indigestion of one of the byers. employees should be interchanged. often forget that it is more And let’s not forget about the regulatory bodies. In cleaning services, this is achieved by moving than not possible to reduce Violation of GOST, HACCP and other norms will employees between objects. At small factories, it cleaning costs. lead the enterprise to a fine or closure. It is is necessary to organize staff so that employees unlikely that the management wants to pay are not as valuable as gold and their schedule Our company has decided to for junk cleaners. And one doesn’t feel like allowed the to replace a colleague in emergency solve the problem. We have paying for poorly done work. Therefore, starting situations. launched a free cleaning to control the work of employees you will audit for large industrial definitely cut down costs. enterprises in Smolensk, Kaluga, Moscow, Tula, Orel and Pskov. As part of the Method#2 audit, we describe how CORRECTLY DISTRIBUTE STAFF one can save on cleaning Another way to save money on cleaning with and what parts of it can the help of staff is to properly distribute their be optimized. The client efforts. Starting to control the work, you will is only required to fill out understand how much time the janitor really HOW TO SAVE ON CLEANING? an application form on the needs for a particular task, and how much he or Let’s summarize. It is possible to reduce the website and indicate “Audit” she will be able to clean per shift. Most often it costs of cleaning by means of: in the comments. turns out that employees clean less than they • employee control; could. And the staff is bigger than necessary. • their correct distribution; If you think that cleaning at With the help of control and calculations of • use of professional detergents; your enterprise is organized working capacity, you can reduce staff and • purchase of specialized equipment; perfectly and you do not need significantly save on salaries. • employee interchangeability. the audit, read the following As practice shows, each of these minor article. Most likely the innovations can significantly reduce cleaning thought “It is worth trying Method#3 costs at an enterprise. a cleaning audit” will come CHOOSE PROFESSIONAL EQUIPMENT to you before the end of the The efficiency of employees depends not only Do you want to know how to save on reading. on how they clean, but also on what equipment cleaning your facilities? they use. Purchasing a modern floor washing So how to cut costs? machine, for example, one can speed up floor cleaning manifold. Moreover, the more efficient Fill an application form on our website the machine is, the less time will be spent by Cleaning911.ru, and we will contact you the cleaners. within 10 minutes. This way you will also be able correctly allocate Our number: staff and save on wages. The main thing is to calculate the benefits of buying expensive 8-800-234-2-911 equipment. 38 Supplier Park

Mercator Kaluga LLC

Every fourth new specialized vehicle that entered the country's roads was manufactured in Kaluga (Mercator Holding).

Nikita SIDOROV, senior vice president of the holding:

— At the moment, the plant produces up to 750 units of municipal special equipment of The company created Smart various types. Even 2018 Road software packages for when it all started in Mercator launched the Digital the computer-aided control of 2004 we understood Monitoring and Control of City special equipment fleets and that the only right way Cleaning project as part of the the municipal infrastructure as a for us is to manufacture Digital Kaluga concept. whole. here. And today we It is important for the have, in fact, the full implementation of the Smart cycle of localization of 2019 City project, which is included the machines that were The first export project on supply in the national Digital Economy previously foreign, and of attachable equipment to program and Housing and Urban now are 100 percent Kazakhstan. Environment national project. produced in Russia.

Mahle Technologies Rus LLC

Mahle Technologies Rus LLC — an industrial warehouse of Mahle Aftermarket. The company is a member of the Mahle Group Concern, a global supplier of components and spare parts for motor vehicles.

Mahle Technologies Rus LLC organizes the delivery, distribution and promotion of Mahle Aftermarket products on the market of the countries of the Customs Union - Russia, Belarus 2016 2018 and Kazakhstan, as well Launch of the new Mahle Mahle is recognized as the as provides after-sales product line - Mahle Letrika best supplier of the year in the and warranty services. market of auto parts for cars and trucks (ARMTEK Group of Companies) Supplier Park 39

Fuchs Oil LLC

Fuchs Oil is a Kaluga plant of the German FUCHS concern producing lubricants and associated products. The company produces a wide range of lubricants for motor vehicles (motor oils, gearbox and transmission oils, shock absorbing fluids) and industrial products (hydraulic oils, cutting lubricants for cutting and grinding metals, compressor oils, etc.).

Kaluga plant operates a chemical laboratory featuring high-tech equipment. Modern technologies ensure three-stage quality control at production stage, and continuous 40,000 > 30 monitoring of the company's products tons of products Items during their use. per year produced

Toyota Tsusho RUS LLC

Toyota Tsusho RUS LLC is a subsidiary of the Toyota Tsusho RUS LLC is a warehouse complex for Japanese trading house Toyota Tsusho Corporation, the supply of automotive components (bumpers) from which is a part of Toyota group of companies. Magna Technoplast plant. Currently, the class A office The company supplies equipment, spare parts and warehouse complex is located in Kaluga-South for equipment, components, etc. to Russian industrial park. manufacturers of automobiles of famous brands. Company branches in Russia operate in four cities: Moscow, St. Petersburg, Togliatti and Kaluga. Kaluga 40 Auto-cluster

Cooperation

№ PRODUCER PRODUCT BUYER

1 HP Pelzer Rus LLC sound insulation

2 Benteler Automotive LLC suspension parts

3 Continental Kaluga LLC car tires

4 Toyota Tsuse RUS LLC warehouse complex for the supply of automotive components

Forecia Automotive 5 exhaust systems, interior and seats details Development LLC

Branch of Continental 6 pipelines for air conditioning systems and power steering parts Kaluga LLC in Kaluga

7 Fuchs Oil LLC lubricants

8 Fuyao Glass Rus LLC car glass

Gestamp-Sever-steel- 9 body elements Kaluga LLC

10 Lear LLC car seats

Branch of Magna Automotive 11 car bumpers and front modules Rus CJSC in Kaluga

SMRK Automotive 12 plastic interior details Technology Ru LLC

YAPP Rus Automotive 13 fuel plastic tanks gas lines and their components Systems LLC

Severstal-Gonvarri-Kaluga 14 metal service center LLC

15 HT&L Fitting LLC assembly of car wheels

16 Plastic Kaluga CJSC AD automotive components manufacturing

Mahle Technologies Rus 17 industrial warehouse facility LLC

18 PLANT MPK LLC automotive components manufacturing

19 Mercator Kaluga LLC production and installation of understructures

20 SMK LLC fuel tanks for trucks

Continental components for fuel supply electronic control systems 21 Automotive Systems RUS and ignition of explosion engine manufacturing LLC

22 Volvo Components LLC components for truck manufacturing

AIS Automotive Interior 23 plastic interior parts manufacturing Systems LLC

42 Infrastructure

Automotive Localization Opportunities

COMPREHENSIVE OFFER TO INVESTORS

a land tax support plot incentives

Wide selection of sites for production 12 7,500 >100 facilities: industrial hectares residents parks — total area

of the auto-cluster enterprises operate on the sites About 90% of industrial parks

Greenfields Brownfields Build-to-Suit

2 1024 hectares 18 sites — total area residents

% – customs duties – transport tax – land tax – property tax 0 – VAT FREE CONNECTION TO UTILITIES ACCESS TO CUSTOMS AND LOGISTICS TERMINALS Infrastructure 43

2 PSEDA 2 residents

RATE / DEADLINE TAX

0% — for 5 tax periods for profit After receiving the first profit 12% — 6-10 tax period

0% — the first 5 tax periods for property 1.1% — 6-7 tax period 1.5% — 8-10 tax period

0% — of the tax period in which a resident is included in the register of PSEDA residents land land

7.6% — (PF –6%, FSS –1.5%, MHIF –0.1%) for 10 years for PSEDA residents who insurance premiums received status during the first 3 years from the date of establishment of PSEDA

Integrated system of government support for investment and innovation:

One Window guarantees quick AGENCY FOR REGIONAL BUSINESS DEVELOPMENT approval of a project. DEVELOPMENT OF KALUGA REGION AGENCY Effectively, applying Work with investors in a Single Window Government support for small and to the Regional format medium-sized businesses Development Agency, an investor gets a no-cost employee from the Government of Kaluga Region, INNOVATION DEVELOPMENT DEVELOPMENT CORPORATION, who quickly and AGENCY SEZ KALUGA efficiently resolves Development of innovation Development of industrial clusters zones his problems.

Assistance to enterprises in obtaining Assistance to Kaluga Region Assistance in obtaining federal tax 01support in the framework of government 02enterprises in entering into 03incentives to enterprises making capital programs of the Russian Federation, special investment contracts investments in investment projects federal target programs, FER programs

Register of investment Register of regional Register of update and Benefits to R&D business and 04projects 05investment projects 06modernization programs 07the availability of R&D structure 44 Logistics Innovative infrastructure for export development

Kotka Helsinki Saint Petersburg RUS SIA Yekaterinburg Moscow Riga Nizhny Novgorod Novosibirsk Klaipeda Vorsino Krasnoyarsk Rosva Chita Hamburg Warsaw Ozinki Irkutsk Rotterdam Brest Zabaykalsk Malashevichi Naushki Manzhouli Antwerp Duisburg Khabarovsk Aktobe

KAZAKHSTAN Dostyk Shenyang Alashankou MONGOLIA China-Europe-China Altynkol Zamyn-Üüd Vladivostok transit routes Almaty Nakhodka Novorossiysk Ürümqi Export Russia-China Beijing Yingkou Tianjin Dalian

Incheon Yokohama • Projects are implemented under Shilong VORSINO FREIGHT Qingdao the guidance of Russian Export CHI NA Kobe Center JSC in partnership with VILLAGE Zhengzhou Chengdu Russian Railways Logistics JSC Shanghai Suzhou and Transportcontainer PJSC • Russia's first multimodal transport and logistics complex in a cargo Chongqing • Vorsino Freight Village - the point village format Changsha Ningbo of reference on One Belt - One • The largest transit hub between Road route Europe and Asia in the central part Guangzhou of Russia • Ready access to international Shenzhen transport corridors ONE BELT — ONE ROAD • Included in the General Development Plan of the Moscow • 2016 — start of the project railway junction and the list • optimal terms and shipping costs from of terminals for cargo flows Asia to Europe by train distribution from Moscow • 12-14 days — delivery time from China • Container and customs terminal • 46,706 containers have arrived at the services, industrial and warehouse railway Vorsino Freight Village terminal real estate from the moment the route was open, • Total area of the complex is 600 incl. 10,794 containers — hectares for Samsung Logistics 45

Kotka Helsinki Saint Petersburg RUS SIA Yekaterinburg Moscow Riga Nizhny Novgorod Novosibirsk Klaipeda Vorsino Krasnoyarsk Rosva Chita Hamburg Warsaw Ozinki Irkutsk Rotterdam Brest Zabaykalsk PROJECTS Malashevichi Naushki Manzhouli Antwerp Duisburg Khabarovsk Aktobe

KAZAKHSTAN Dostyk Shenyang Alashankou MONGOLIA Altynkol Zamyn-Üüd Vladivostok Almaty Nakhodka Novorossiysk Ürümqi Digital Beijing Yingkou Container Tianjin Dalian Terminal: – terminal and railway Incheon Yokohama Shilong technological processes Qingdao CHI NA integration Kobe Zhengzhou – terminal work automation Chengdu Shanghai – expansion of electronic Suzhou document management Chongqing

Changsha Ningbo

Guangzhou

Shenzhen

REGULAR ROUTES OF VORSINO FREIGHT VILLAGE Smart RAILWAY TERMINAL Logistics: – organization of regional • Urumqi (PRC) Import: trains network in • Dalian (PRC) • Riga (Latvia) accordance with Moscow • Shilong (PRC) • Brest (Belarus) transport hub system • Yingkou (PRC) • Ust-Luga (Russia) – organization of trains to the • Suzhou (PRC) • Saint Petersburg (Russia) capital, container unstuffing • Guangzhou (PRC) • to parcels and delivery • Chengdu (PRC) around the city by small- • China (sea transport) Export: tonnage transport • Tianjin (PRC) • Chengdu (PRC) • Ulan Hub (China) • Hanoi (Vietnam) 46 Export

Export from the Russian Federation

MAIN TRADE PARTNERS OF RUSSIA (the 1st half of 2019) RUSSIA

5 2 3

4 1

Share of Total Exports in 2019 According to the Federal Cus- toms Service of the Russian 1. China 12.4% Federation, Volkswagen Polo, 2. The Netherlands 11.9% Skoda Kodiaq and Skoda Rapid manufactured in Kaluga are 3. Germany 7.7% among the top 10 exported 4. Turkey 4.7% passenger cars at the end of the first half of 2019. 5. Belarus 4.7%

COMMODITY STRUCTURE OF KALUGA REGION EXPORT (the 1st half of 2019)

2.2% 3.0% 2.5% 5.2% Fuel Food and agricultural products 6.0% Metal products Timber and paper products

5.9% Engineering Precious metals and gems Chemical products Other goods

9.7% 65.5%

Source: Russian Export Center Export 47

Export from Kaluga Region

MAIN TRADE PARTNERS OF KALUGA REGION (the 1st half of 2019) RUSSIA

3 1 5 2

4

Enterprises and Share of Total Exports organizations in 2019 registered in Kaluga 0.02 Region deliver goods to billion dollars 1. The Netherlands 19% — volume of Kaluga exports

2. Kazakhstan 12% 103 countries of the th world 3. Belarus 10% 15 4. Egypt 7% place in the ranking of Russian regions 5. Ukraine 5% by export volume

COMMODITY STRUCTURE OF KALUGA REGION EXPORT (the 1st half of 2019)

8.5% 4.1% 32.1% 3.2 times — decrease in passenger 5.7% Metals and metal products car imports to Russia since 2009* Engineering products

Mineral products

Chemical industry products, rubber According to Autostat products analytic agency, there are 310 passenger and Wood, pulp and paper products light commercial vehicles per thousand of Russia Other goods residents. This is 2 times 24.6% less than in European countries. 25.0% Source: Autostat 48 Opinion

From Patchwork to ITS Ecosystem

Anton ZHURAVLEV, Digital Era of Transport Association President

ON THE DISADVANTAGES OF massive instrumentation of vehicles special software to process, analyze CURRENT ITS SITUATION IN and, in the first place, passenger and forward the result to the RUSSIA AND ON WHAT IT’S transport equipped with GLONASS situation center of various services, NECESSARY TO CHANGE system. Later individual elements of to the governor’s desktop, to the ITS began to appear in our country: user's mobile phone, etc. A simplified At the bottom of digital technologies ATCS (automatic traffic control scheme looks like this: collection - development for transport - and in system), photo and video recording analysis - impact. the first place I am talking about and tolling systems on toll roads, At the same time, intelligent road infrastructure in the regions weight and dimensional control, transport systems should be and on federal highways there passenger services etc. formed as a single ecosystem of are intelligent transport systems. interconnected digital services ITS are the foundation for solving and capabilities, which are able to industry tasks set by Digital manage traffic, traffic flows and Economy. Today, we have already WHAT IS THE KEY PRINCIPLE OF individual vehicles, and in the future, achieved a lot in the field of ITS ITS FUNCTIONING? highly automated TS, to ensure all development, but there are still types of security. In addition, the many problems. They need to be ITS have to receive data from various system will be able to assist in the addressed, and rather urgently. sensors, peripheral equipment, maintenance and management of It all started 10-12 years ago with infrastructure or vehicles, using road industry life cycle processes. Opinion 49

WHAT ARE THE COMMON WHAT IS AT THE BOTTOM OF THE information and communication PROBLEMS FOR THE PRESENT PROBLEMS AND HOW TO SOLVE resources that provide transport TIME? THEM? management automation and safety on transport. There’s good news that many The main reason is the lack of We also need to update the role solutions have been recently coordination of efforts by various of highways not only as logistics implemented in the regions. But in structures, almost full absence routes, but also as information and the current state of affairs there of national standards and legal telecommunication means. This will are a number of shortcomings and framework. not only ensure digital cohesion of problems. Therefore, today it’s necessary to form territories, provide all modern digital First of all the solutions are a single policy to define the rules for services at highways, including implemented discretely, there is control scope elaboration, technical user services, information and no necessary integration between regulation and market development communication support for emergency systems. For example, in a particular for these technologies as parts of services, social and municipal region many software and hardware a single software complex in which facilities, but will also contribute to solutions and automating processes a wide range of different structures telemedicine and digital educational in transport are used. They operate on directly or indirectly involved in traffic facilities development in remote areas. the basis of a variety of equipment, management on roads would join their Overall it imposes the need for sensors, cameras, and vehicle forces. regulatory support of intersectoral detectors. Moreover, each of these Moreover the regulatory and technical cooperation in the field of systems solves narrow problems support needs to be updated. In technological digital resources without exchanging data with the particular, it’s necessary to amend development used at the road others, although the entire region the definition of a highway in Federal network. would benefit from such an exchange. Law No. 257 “On Roads and Road Unfortunately such a situation Activities ...” and to include in it is typical. According to experts’ obligatory digital infrastructure and requirements. Whereby the estimates no more than 30% of the WHAT CAN REGIONS DO? requirements should be laid down data collected by such equipment can both related to energy and peripheral For the maximum efficiency regional be used to improve the quality of life equipment used for monitoring, programs for the development of in the regions. And that, of course, is controlling and informing, including intelligent transport systems are not enough. hardware and software resources for needed. For such a program to Do not forget that effective data processing and storage. function, it is necessary to develop management of transport environment Critically important is the a Masterplan for the Integrated is impossible without open and development of laws and regulations Development of Intelligent Transport integrated data - only thus Big Data that would define the concept of Systems (MP ITS) and use it as the and artificial intelligence will provide digital highway infrastructure. In other basis for statutory regulation of maximum benefit via analysis. words we need to work out consistent a set of measures in the subject. Another problem is that management and mandatory requirements to It is also important to create an and maintenance of various ITS equipping roads with ITS and confirm information platform that will ensure subsystems is carried out by various its capabilities. We also can’t escape the integration of all subsystems agencies or administrations, which the issue of financing this system. and objects into a complex system increases the burden on regional Amendments to the law on PPPs based on common protocols. Besides budgets and reduces the effectiveness and concessions are also required, we should develop the integrated of ITS. The solution is to create a expanding the list of the public-private telecommunication resources of ITS single body of key competencies. partnership object structure. and create peripheral components It will help to integrate all the of the system, including monitoring, automated information management information, payment systems, systems of the region into a single etc. This will allow to ensure the control, forecasting and management COMMUNICATION AND functional completeness and center. REGULATION security of transport management The issues of interdisciplinarity have services throughout the region’s road not been resolved either. The data The main attention in the development infrastructure. collected by transport agencies is of ITS in Russia should be paid at But I have to repeat: these problems necessary for both the Ministry of information and communication should be dealt with at all levels. If Emergencies and law enforcement infrastructure organization on federal problems are not solved, they will agencies. and regional roads. begin to accumulate faster, and the Therefore our challenge as part Automobile roads and road networks positive results of using ITS that of digitalization is to ensure ensure life-sustaining activity of the we see today will fade against the interconnection between the subjects regions and the country as a whole, background of general difficulties. of the Russian Federation and regional therefore their safety is an important Ecosystems creation require the and federal infrastructures in order to part of national security. Hence it’s efforts of all stakeholders. obtain a seamless and uniform digital essential to use information and road infrastructure. Thus all the above telecommunication systems, networks problems remain to be solved. of public use and commercial Photo Story AUTOEVOLUTION

International Forum for the Development of Automobile Manufacturing and Innovation Driven 10 yInfrastructureears

Innovation-driven infrastructure

Growth strategies

Experience and Prospects Technologies and Services

Discoveries Personnel training Lean Manufacturing Photo Story AUTOEVOLUTION

Export development Competitiveness Investment in the industry

Logistic chains Government support for the industry

Success Stories Cluster development In-depth localization

Digital Ecosystem Looking to the Future 52 Infrastructure

Skilled Personnel

Alexey NIKITIN, Head of Training and Retraining Center for personnel in the automotive industry:

— Kaluga training center for car manufacturers was the first institution in the Kaluga region and one of the first in Russia to apply dual training principle. Its creation is closely connected to the regional auto industry development and the provision of qualified specialists to automobile enterprises. Along with new factories opening and production expansion, new training workshops and laboratories were created. Right away we have embraced dual educational system, considering it one of the best models of practice-oriented training. The system is based on the equal correlation of theory and practice, when half of training load is theory, the other Training and Kaluga branch of half - practice. 01 retraining 02 Moscow State Technical personnel center University named after The task of our educational institution is to take for the automotive N.E. Bauman into account the feedback of car companies industry as much as possible. We planned each workshop, equipped laboratories and supplied technological equipment in coordination with HR departments of enterprises. They also were the main co-developers of the programs for which the center provides staff training. Nowadays Kaluga automobile industry enterprises provide Kaluga transport- Kaluga Cadet a production facilities for practical training, 03 technical college 04 Multidisciplinary mentoring functions and scholarships to named after College A.T. Karpov promising students. From the perspective of dual educational principle we train specialists in car painting, metalworking, warehouse logistics and in other popular professions, therefore, almost 100% of our graduates become successful employees of Kaluga automobile cluster Since 2010 a dual enterprises. We train not only students, but also adult Kaluga Technical 05 education system is being population according to vocational training, College, etc. implemented in Kaluga retraining, and further professional education programs. Heads of HR services acknowledge Region. that professional education in Kaluga Region definitely satisfies high international standards.

ALEAN HIGH QUALITY TRANSLATIONS Office 409, 48/8, Plekhanova St. Kaluga Center FROM FOREIGN LANGUAGES Tel.: +7(4842) 79-05-05 for Professional www.proftranslate.ru Translation PERSONAL MANAGER