According to recent studies, the Russian automotive market is set to become one of the most vibrant and fastest growing markets worldwide over the next decade. Only China is ahead. A huge increase in car ownership is underway: Car sales are estimated to rise by approx. 10% each year hitting 2.2 million sold new vehicles in 2010. Sixty percent of those will be from international car manufacturers while today Russian manufacturers still supply seventy percent of the demand. The researchers expect that among the almost 1.5 million sold international cars in 2014, there are about 700,000 imported and 800,000 locally produced automobiles as more and more foreign OEMs invest in local production and assembly facilities.

International automotive suppliers, too, can benefit from the booming Russian automobile market. The rapid expansion of foreign car manufacturers will result in the development of a capable supplier industry in Russia. Up to now only few international suppliers operate plants or branch offices the country. In the future suppliers are expected to participate more than ever in the value-added process of locally operating car manufacturers. Today the value chain of Russian OEMs is typically still vertically integrated. Currently suppliers possess a mere 26% share in it, a number which is going to rise to an estimated 43% by 2010. Suppliers of international OEMs in Russia will increase their share in the value chain to 70% in the same period of time, up four percent from an already remarkable two thirds share in 2005.

Market conditions in Russia for global suppliers, too, brightened up in 2005 by adopting resolution 166 in April 2005 defining an “industrial assembly” regime in order to stimulate FDI from the automotive industry and encourage the further development of car assembly productions. This regime provides for reduced or even zero-rated import tariffs on automotive parts and components, improving sales opportunities for international suppliers. In September 2006 the benefited product range was extended once more.