Russian Auto Boost With Electric, Driverless & Top Range Cars All About To Be Launched

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The Russian auto industry is starting to make waves, despite the Coronavirus outbreak with the pending launch of three different types of vehicles: an electric car named the Zetta, self driving taxis from Yandex, and the high-profile Aurus, set to rival Bentley in the top range stakes.

Russia’s first electric car, the Zetta, is set to enter into mass production in late 2020, Denis Manturov, Russia’s Industry and Trade Minister has announced. The Zetta will roll off the production line in the city of Tolyatti, one of the major centers of Russia’s automotive industry. The cars will first be sold on the domestic market, with export markets to follow. Zetta’s producers have stated that 10 cars will roll off the production line this year, while they are expecting to increase this to 2,000 vehicles next year, with an ultimate capacity of 15,000 per annum.  It will cost about Rubles 450,000 (US$6,000) and have a range of 200 kilometers for cheaper models to 560 kilometers in advanced ones.

The demand is likely to be in Moscow and St Petersburg. Just 300 electric vehicles were sold in Russia last year meaning if the Zetta is positioned properly and the infrastructure is well designed there could be huge demand.

Moscow could have a fleet of driverless taxis available by 2024, according to Russian Deputy Transport Minister Aleksey Semyonov. “If we efficiently start implementing the plan we are developing on the basis of our stakeholder authorities and key companies (the Transport Ministry, the Interior Ministry and the Ministry of Industry and Trade), then, I believe 2024 is the year when we can launch driverless taxis” he said. The taxi service will be provided by Russian technology giant Yandex. Tests of over one hundred robotic cars are currently underway in thirteen different cities.

Yandex first unveiled its autonomous car in 2017, saying it was entering the driverless technology market and intended to capitalize on its already existing online services like map navigation, traffic surveillance, and image recognition for its other major branch – an Uber-like taxi service. In 2018, experimental self-driving cars were launched in Moscow and Kazan.

The long-anticipated mass production of Aurus cars is set to start at the beginning of 2021. The news was announced by the Russian Industry and Trade Ministry last week, following Russian Trade Minister Denis Manturov’s visit to the Ford Sollers plant in the Alabuga special economic zone in Tatarstan, where the high-end vehicles will be assembled.

After several pilot Aurus cars roll off the production line in 2020, some 360 cars are expected to be produced in the first quarter of 2021. By 2022, the plant’s production capacity is set to surge nearly fivefold to more than 1,700 vehicles. The plan is to eventually manufacture more than 5,200 cars per year in 2024.

“Robotic manufacturing systems at the Alabuga plant allow us to perform technically complex works,” the Industry and Trade Ministry said in a statement. “We are using digital production technologies… as well as unmanned and augmented reality technologies in developing this car.” The new Russian-made Aurus, part of the ‘Kortezh’ auto development project, debuted in May 2017, when the first limousine of the brand was unveiled. Initially designated for top Russian officials, it was then decided the car would be made available to the general public in both foreign and domestic markets. Despite it being more than a year away from the launch of mass production, more than 600 pre-orders have been made for the Russian luxury cars, including by the Chairman of Dezan Shira & Associates for use in Russia. The vehicle is expected to retail at about Rubles 10 million (US$140,000).

The Russian auto market has been growing and is expected to purchase about 50 million vehicles by 2021, although those figures may be impacted by the recent coronavirus. It is the ninth largest auto market globally.

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Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at russia@dezshira.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

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