BMW Considers Russian Venture

12/02/96

Reuters reports that German automaker BMW AG announced at a Moscow automotive conference last Tuesday that it is considering assembling cars in Russia. BMW director for Russia Wolfgang Vollath said, "we are considering setting up a small factory on Russian territory to assemble cars for the Russian market."

Although Vollath did not say what type of car BMW might assemble in Russia, he did explain some of the factors the carmaker is thinking about. "Duties levied on imports of ready-made cars into Russia are high," he said. "A local assembly factory is a way for us to reduce costs while delivering the same quality cars . . . BMW is very much interested in working with a strong local partner."

Vollath also commented on BMW's search for a Russian partner to join it in a venture to produce Rover engines. Vollath said that BMW, which owns British automaker Rover Group Ltd., sought a Russia-based Rover engine factory that would allow it to export engines "to other developing regions." Rover already supplies engines for Russian cars such as the Okas, made by AO AvtoVAZ and AO KamAZ, and the Volgas, made by AO Gorkovsky Avtomobilny Zavod (GAZ).

Vollath said BMW wanted to contract Russian suppliers for its projects, and that there was "significant potential for local sourcing" of alloys, aluminum, ceramics, plastics, steel and other material. He also mentioned that BMW has discussed "the purchase of machine tools," from GAZ.

Paul Dever -- The Auto Channel