Russian companies continue to show an interest in acquiring manufacturing assets in Great Britain. Moreover, the problems of English transport engineering are playing into the hands of domestic producers, which are acquiring relatively inexpensively attractive businesses, getting not only equipment but also current level technical developments. In addressing in the most effective way the problem of lagging behind the West in terms of engineering and technology, Russian companies are trying to resist the onslaught of foreign competitors, which are conducting an active expansion into the Russian market.
Following GAZ Group, which acquired the English company LDV and as a result got the equipment of a Birmingham factory and the successful model of the commercial Maxus range, KamAZ, one of the most successful players in the Russian automobile industry, has joined the game. Yesterday, Interfax news agency, with reference to the government of the Tatarstan Republic, reported the purchase of an English factory producing McCormick tractors. Tatarstan’s Prime Minister Rustam Minnikhanov announced this in the course of a meeting with representatives of the company Claas in Hanover, where an international exhibition for agricultural machinery is being held. Minnikhanov added that KamAZ already has experience in joint production with foreign companies. KamAZ will be able to produce European standard tractors.
Since spring 2007 KamAZ has held talks with six European companies and initially chose the holding company Argo SPA (Italy), but production has not been started up. Now, it is a factory in Great Britain. Specialists have noted that the English make has the best balance of price and quality. In addition, in England the McCormick factory is closing. KamAZ will be able to transfer equipment and accessories from there and in the shortest possible time begin assembling tractors in Naberezhnye Chelny. Obviously, in this situation the cost of the deal has managed to be kept to a minimum.
In the first phase, in 2008, the company intends to make 2,500 tractors and in the second (2009) already 4,000. Nothing is yet known about the size of investment in the project. The main competitor of the English tractors in Tatarstan will be the products of a joint venture created by the merger of ELAZ and the Minsk tractor plant. According to the Minsk tractor plant, next year, the joint venture intends to increase output and assemble over 8,000 tractors. In Tatarstan, about 2 million hectares of land are owned privately, mostly by large land owners. They will buy powerful modern, and mainly western, agricultural equipment.
Analysts cautiously assess the prospects for the new KamAZ factory. Despite the steady increase in demand for agricultural technology, there are not that many customers able to afford it. It is well known that most agricultural technology is usually leased.
KamAZ is a large automobile company comprising 14 independent factories. The company produces trucks (more than 30 models, with more than 400 fittings and right hand drive), trailers, buses, engines, power units, and various tools. The company occupies 8th place in the world in terms of production volume of diesel engines. Last year the company sold 43, 344 trucks, a 34% increase on 2005.
Denis Kvasov, "Expert Volga"
A McCormick tractor
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Photo:
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