Daimler looks to be closing in on a site near Moscow as the choice for its forthcoming assembly plant in Russia, according to a Prime-TASS news agency report. Daimler has yet to officially confirm that it will assemble cars in Russia but CEO Dieter Zetsche has confirmed in the past that the company is looking closely at such a project despite the difficult macro conditions the company currently faces, with the passenger car market experiencing a 36% y/y fall in sales volumes last year. Prime-TASS reported that local authorities in the Moscow region have approved an application to establish an assembly site in the region. Vsevolod Babushkin, the head of the Moscow region's transport and engineering department said, "For our part the project has received a preliminary approval. Now it depends on the authorities of the Moscow region. But in general the region is interested in."
Significance: The company's Mercedes-Benz brand is currently the leading premium brand in Russia despite not currently having any manufacturing capability there, unlike its main rivals Audi and BMW. The report claims that the new plant is likely to build the S, E, ML, GL and A Series, although it is not yet clear what the model mix of Mercedes-Benz's Russian plant will be. IHS forecasts that Mercedes-Benz will sell 34,000 units in Russia this year down from 41,000 units last year when it did very well to significantly outperform the declining market. This tally will still leave it well ahead of BMW on 26,000 units and Audi on 19,000 units.
