UPADTE 1-Putin says Russia to make 2 mln cars a year soon http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-10-25T100459Z_01_L25260860_RTRIDST_0_AUTOS-RUSSIA-OUTPUT-UPDATE-1.XML&rpc=66&type=qcna
Wed Oct 25, 2006
(Adds Putin quotes, details, background)
MOSCOW, Oct 25 (Reuters) - President Vladimir Putin said on Wednesday he expected Russia's annual car production to reach two million units in several years' time as factories built by foreign car makers ramp up output.
"I believe that in a few years we will reach a production level of some two million cars a year, which will allow us to meet the rising demand of our population," Putin said in a televised question-and-answer session.
Russia's current annual car output totals 1.0 million to 1.1 million units. The nation's largest car maker AvtoVAZ (AVAZ.MM: Quote, Profile, Research) sold 721,000 units last year.
Putin said some 15 foreign auto makers are lining up to open assembly lines in Russia, where fast economic growth fuelled by booming oil exports has boosted consumer demand.
He said the government expected the share of locally-made components used at foreign-run car plants in Russia would soon rise to 50 percent and eventually reach 70 percent or more.
Russians are estimated to have spent more than $22 billion on vehicles in 2005, of which more than half went on new imported cars.
Market analysts estimated Russia's car market at 1.84 million vehicles last year, up 14.4 percent from 2004. Sales of new foreign cars in Russia rose to 563,400 units in 2005, an increase of 60 percent compared with 2004, according to auditors Ernst & Young.
U.S. auto giant Ford Motor (F.N: Quote, Profile, Research), doing brisk business in Russia, has projected that sales of new foreign cars in Russia will soar to around 850,000 units this year from just 46,000 in 2000.
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