Russia Faces New Interregional Automotive Industry Cluster

It may include the former Russian plants of Volkswagen, Nissan and Hyundai in three regions of the country

The authorities of St. Petersburg, the Leningrad and Kaluga regions are discussing the creation of ICAP - the Interregional Automotive Industry Cluster - with the Ministry of Economic Development and the Ministry of Industry and Trade. It will include the former Russian plants of Volkswagen, Nissan and Hyundai.

Russia already has experience with similar auto clusters - in the Samara and Nizhny Novgorod regions, and in Tatarstan. They unite about fifty different enterprises related to auto production

A source in the government shared this information with Izvestia. It is assumed that the cluster will save on logistics - components for cars will be assembled near the car factory. It will help restore not only production, but also jobs for Russians, and will improve internal production ties between regions - for example, in terms of purchasing electronics and parts.

As noted, it will be easier for auto enterprises in a single cluster to get state support - for example, loans at a preferential rate - 30% of the key rate of the Central Bank of the Russian Federation plus 3%, a reduction in insurance premiums to 7.6% for enterprises participating in special investment contracts. Or reimbursement of up to 150 million rubles for the purchase of initial batches of components produced by other cluster participants. It is easier to organize the localization of automotive components and auto components in the cluster - even with the support of friendly countries, such as China.

However, there are also objections to the idea. In particular, the consolidation of plants will require additional funds and resources. There is also a risk of secondary sanctions, which may scare away foreign partners even from friendly countries. Auto experts and economists also note that all the plants indicated by the source have their own specifics - they were originally built by competing companies. Combining them into a single cluster will require additional effort.

Currently, the ex-Volkswagen and ex-Hyundai in the regions for which the ICAP is being discussed are owned by the Russian company Art-Finance. The second production has already been launched from downtime. But at the first Kaluga plant, the downtime was extended again until the end of February.

Ex-Nissan is now Avtozavod St. Petersburg LLC, a subsidiary of AvtoVAZ. They have already launched production there and registered their own new XCITE auto brand - the first cars under it will go on sale in the spring, and they will be shown and told about them, according to the latest data, at the end of February. It is possible that PSMA RUS in the Kaluga region, which also began to work for AvtoVAZ, and before that assembled Peugeot, Citroen, Opel and even Mitsubishi, will also be included in the cluster. But even without the cluster, it has been working for more than a month.