BUSINESS Russian-built car hopes to overtake rivals in luxury sector


Russian-built car hopes to overtake rivals in luxury sector


02:08, October 18, 2019


(Photo: CGTN)

When Russian President Vladimir Putin arrived for his fourth-term inauguration ceremony in 2018, he stepped out of a new Russian limousine – not the black Mercedes he had used on previous occasions.

The change demonstrated the president's determination to get behind the state-backed automotive firm Aurus' new vision of Russian car-making, which it is hoping to bring to domestic and global markets.

Aurus' "Kortezh" model was chosen for the president's short drive through Kremlin grounds last year.

This year it launched a new luxury car for the public market. The Senat is a beautiful product, but it comes with an eye-watering price tag of 270,000 U.S. dollars.

The company hopes to break into the Russian market that has been dominated by German, Italian and British firms.

Adil Shirinov, the Chief Executive of Aurus said the company will focus on the home market for a start,  but ultimately Aurus wants to move beyond Russia.

He says he wants to "underline the fact that Russia and Russian projects are absolutely competitive on the worldwide arena and that we can produce products in the luxury segment."

The government is also keen to see success and has provided 189 million U.S. dollars to fuel this new project. The Russian automotive sector grew nearly 13 percent last year and Aurus has already seen 600 pre-orders for a range of its models.

But how will the company fare against luxury rivals in China, where Aurus wants to open a showroom by 2021?

Shirinov makes no secret of the company's Asian ambitions, noting that  "China is one of the most interested markets for future development." The Chinese domestic auto sector has been shrinking, according to the China Passenger Car Association, but the luxury market specifically has shrugged off the wider sector problems.

Tatiana Kofanova, an Automotive Partner at Deloitte, says Aurus will be an attractive new entrant to a congested market but should not expect its sales to be that big. She also points out that because the two countries do not have a free-trade agreement, there could be the burden of potential tariffs and customs duties.

The luxury car market in Russia is awash with foreign firms, from the ubiquitous black Mercedes to flash Lamborghinis, and regular consumer cars are also more likely to be European or East Asian.
But Aurus will be hoping that wealthy – and patriotic – Russians will switch from driving Bentleys and get behind the wheels of an Aurus.

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