Daimler started construction of a new Mercedes-Benz plant close to Moscow on Tuesday, following through on the first new investment by a significant foreign automaker in Russia since Western sanctions were enforced 3 years ago.
Daimler stated in February that it will invest over 250 million euros ($279 million) in the factory, contrary to prevalent prudence among global investors after a prolonged decline caused by sanctions and a collapse in international oil costs.
Russia’s economy has has shown positive indications of healing, while its vehicle market is going back to growth after four years of decline.
Speaking at an event, Markus Schaefer, a member of the divisional board of Mercedes-Benz Cars, stated Daimler had made the decision after a “very, very successful” discussion with the Russian government.
Moscow Regional Governor Andrey Vorobyov stated President Vladimir Putin had personally signed off on the deal, permitting the regional government to offer undefined conditions not available to foreign financiers before.
” Eventually, we wish to construct cars where customers are,” Schaefer stated at the construction site in the town of Esipovo, which is 60 km away from Moscow. “We are confident in the long-term potential of the country.”
International automakers had viewed Russia as an appealing development market till the 2014 sanctions over Moscow’s actions in Ukraine and the financial slump triggered companies to put projects on hold. Car sales have more than halved from a 2012 peak of almost 3 million annually and the General Motors quit the market in 2015.