39555 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Finding Quality Partners: A Review Of The Russian Automotive Component Sector Prepared by: The Automotive Supplier Development Project Team International Finance Corporation Moscow 2004 3 TABLE OF CONTENTS PPREFACEREFACE ............................................................................................................................................................. 7 II.. EEXECUTIVEXECUTIVE SSUMMARYUMMARY .............................................................................................................................. 8 1. Many Russian Automotive Component Suppliers are Making Quality Improvements to Join the International Industry ................................................... 8 2. International-Level Quality is Possible .......................................................................................... 8 3. Russia Is A Rapidly Growing Automotive Market ...................................................................... 10 4. Foreign Designs and Brands are the Future ................................................................................ 11 5. Government Policy Supports Domestic Production Ventures ............................................. 12 III.I. RRUSSIANUSSIAN AAUTOMOTIVEUTOMOTIVE MMARKETARKET OOVERVIEWVERVIEW .................................................................................. 13 Russia: Macroeconomic Overview ...................................................................................................... 13 Russia: Automotive Market .................................................................................................................... 14 Russian Government Support To The Automotive Industry ................................................. 14 Protective Tariff s ............................................................................................................................ 14 Presidential Decree No. 135 ...................................................................................................... 14 Russian Government Automotive White Paper ................................................................. 15 Rising Sales and Production Volumes ........................................................................................... 15 IIII.II. IFCIFC SSECTORECTOR RREVIEW:EVIEW: PPOTENTIALOTENTIAL SSUPPLIERUPPLIER PPARTNERSARTNERS AANDND CCUSTOMERSUSTOMERS IINN RRUSSIAUSSIA ..................................................................................................................... 18 Review Methodology .............................................................................................................................. 18 Main Findings ............................................................................................................................................. 20 Toyota Production System (Lean Production) in Russia .............................................................. 21 Company Profi les ...................................................................................................................................... 23 1 Avtoagregat ....................................................................................................................................... 23 2. Avtoarmatura ................................................................................................................................... 24 3. AvtoPribor Factory ......................................................................................................................... 25 4. AvtoTechnica .................................................................................................................................... 26 5. Detalstroykonstruktsiya (DSK) ................................................................................................... 27 6. Elara .................................................................................................................................................... 28 7. Energotekhmash ........................................................................................................................... 30 8. Intercos-IV ......................................................................................................................................... 31 9. Kaluga Plant of Automotive Electrical Equipment (KPAE) ............................................... 32 10. Kursk Bearings Company (KBC) ................................................................................................. 33 11. Orleks .................................................................................................................................................. 34 12. Osvar ................................................................................................................................................... 35 13. Polimerstroimaterialy .................................................................................................................... 36 14. Samara Cable Company .............................................................................................................. 37 15. Samaraavtozhgut ........................................................................................................................... 38 16. Soate ................................................................................................................................................... 39 17. Soteks ................................................................................................................................................. 40 18. Toplivnye Sistemy (Fuel Systems) ............................................................................................. 42 4 Table of Content 19. Trek ...................................................................................................................................................... 43 20. ZMZ .................................................................................................................................................... 44 21. ZEiM-Line ......................................................................................................................................... 46 IIV.V. RRUSSIANUSSIAN OOEMEM RREVIEWEVIEW ........................................................................................................................... 47 AvtoVAZ .................................................................................................................................................. 48 RusPromAvto ........................................................................................................................................ 51 GAZ ................................................................................................................................................... 52 KamAZ .................................................................................................................................................... 53 SOK Group ............................................................................................................................................. 54 Izh-Avto ............................................................................................................................................ 55 RosLada ............................................................................................................................................ 57 SeverStalAvto ....................................................................................................................................... 58 Ulyanovsk Automobile Factory (UAZ) ................................................................................... 59 Moscow Group Holding ................................................................................................................... 60 VV.. FOREIGNFOREIGN OOEMEM RREVIEWEVIEW ............................................................................................................................ 61 Foreign OEMs in Russia .................................................................................................................... 61 Ford Motor Company ZAO .............................................................................................................. 63 General Motors – JSV “GM-AvtoVaz” ............................................................................................ 64 Renault - JSC “AVTOFRAMOS” ......................................................................................................... 65 Avtotor: KIA, BMW ............................................................................................................................. 66 TagAZ: Hyundai, Daewoo, Citroen ................................................................................................ 67 VVI.I. AANNEXESNNEXES ...................................................................................................................................................... 68 Annex 1. International Automotive Suppliers in Russia ............................................................. 68 Annex 2. Russian Automotive Component Suppliers Locations in Russia ........................... 70 Annex 3. Information Sources On Russia .......................................................................................... 71 Annex 4. Sources