Also planning to increase the localisation of steel to nearly 100% by the end of 2016

Ford Sollers, the joint-venture (JV) between US automaker Ford and Russian car company Sollers, is planning to increase localisation of interior components, according to local publication SKRIN Newswire. The report suggests that Ford Sollers is planning to double the usage of the number of Russian-made plastic parts in its cars from the current levels of 86 to as much as 150 by the end of this year. The plastic materials sourced from the domestic companies will be used in the car's interior and exteriors, including bumper, dashboard, air vents, frame elements, air heating and ventilation systems, and external vents, among others. Currently, the JV uses plastics supplied by Russian automotive component suppliers such as Tathimplast, Magna Automotive Rus, and Faurecia Interior systems. As well as this, Ford Sollers is also planning to increase the localisation of steel to nearly 100% by the end of 2016, up from the current levels of 75%. The JV sources a majority of its steel requirements from Russian steelmakers such as MMK and Severstal. The report further suggests that Ford Sollers is reportedly planning to begin local production of 1.6-litre engines at the Yelabuga plant before the end of this year.

Significance: Ford has actually been one of the worst performing OEMs in an already difficult local market, with sales falling by nearly 50% year on year (y/y) so far, not helped by the relatively high price points of Ford's vehicles in the country and their relatively high levels of imported content. However, Ford is betting on long-term recovery of the market, and is adopting a series of strategies, including acquiring preferential shares in the Russian JV to gain larger control, and announcement of a USD400-million investment in the project to produce more new models. IHS Automotive expects Ford's Russian sales to decline by 23.8% y/y to 50,371 during the full-year period this year, although we predict a gradual uplift in its performance starting next year, with sales forecast to pass 100,000 units in 2019.

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