Far Eastern joint venture «Sollers-Bussan» for the production of off-road vehicles Toyota Land Cruiser Prado cease production of cars, a cooperation agreement terminated. At Toyota, the reason for the closure of the project called «economic irrationality», experts believe that the other assembly joint venture «Sollers» in Vladivostok — with Mazda and SsangYong — are at risk, informs «Pacific Russia».
Updated SUV Toyota Land Cruiser Prado is available at the Toyota Tahara plant, and will be imported to Russia from Japan, should be the message Toyota. Earlier model is manufactured at the plant «Sollers» in Vladivostok («Sollers-Bussan» — parity joint venture «Sollers» and Mitsui & Co.). As explained by the distributor of Toyota in Russia, the assembly was halted on June 26 and the quadripartite agreement (between the «Sollers», «Sollers-Bussan», Mitsui and Toyota Motor Corp.) has terminated. At Toyota, claim that the gap of the contract is not related to the current market situation and does not have a political agenda, «Partners came to the conclusion that the project is economically not feasible in the long term.» Joint venture operates under the agreement on industrial assembly of 25 thousand. Machines (gives customs exemptions on the import of components). The Ministry of Economy said that the agreement with «Sollers-Bussan» continues to operate.
Since the model previously supplied from Japan, the transition is completely on imports will not affect the price, but it can change as the updated model, specified in the Toyota. Recommended retail prices for the Land Cruiser Prado start at 1.9 million rubles. In «Sollers» reported that, together with Mitsui company «is considering the production of» other models «Sollers-Bussan,» so staff reductions at the plant are planned. Sources «Kommersant» people familiar with the situation say that the parties agreed that Toyota Motor Corp. pay «Sollers-Bussan» part of the costs associated with the closure of the project. Another source «b» in the industry claims that the decision to terminate the cooperation Toyota adopted unilaterally about six months ago.
The site «Sollers» in the Far East consists of two production companies — «Mazda Sollers Manufacturing RUS» and «Sollers-Bussan.» Power plant — 60 thousand. Machines, complete design — 100 ths. Cars a year. In 2014, production amounted to 68 thousand. Machines and remained at the level of last year. «Sollers-Bussan», founded in 2010, launched SKD Toyota Land Cruiser Prado in February 2013. In 2012, «Sollers» transferred its stake (50%) as collateral to VEB loan to 870 million rubles. for up to five years. In «Sollers» reported that the loan is repaid a year ago. VEB confirmed this.
According to the Association of European Businesses, for January-July, Toyota’s share of the Russian car market fell by 0.2 percentage points to 6.2%, own sales fell by 36.9% to 89.8 thousand. Machines. In 2014, brand sales rose by 5% to 161.9 thousand. Cars, the share of sales Land Cruiser Prado in this volume amounted to 10.7% or 17.4 thousand. Cars (up 20%).
The two sides «b» in the market believe that in order to continue to profit from the enterprise requires large volumes of production and localization. At the same time deepen the localization of the same model, all the more so «nemassovoy» does not make sense — it would be interesting at the volumes of manufacture from 40 thousand. Machines and above, I’m sure another source «b». At the same time there is also Toyota’s own agreement on industrial assembly: the company collects model Camry in St. Petersburg. The total investment in the plant — 16 billion rubles., In 2014, production increased by 2.6% to 36.6 thousand. Cars (according to recent data, the localization of 30%). As part of the obligations under the industrial assembly in 2015, the company has to increase the capacity to 50 thousand. Up to 100 thousand. Cars a year. In 2016, it plans to start production of the model RAV4 (investments amount to 5.9 billion rubles.).
For «Sollers» to invest in the joint venture are not very interesting, it is believed the sides «b»: companies need to seriously invest in the modernization of Oise. Source: «b» believes that «Sollers» project was first and foremost a «political»: it is related to an important issue for the government of the Far East. In September 2014 the Ministry of Economy and Primorsky Krai signed an agreement on the establishment of Vladivostok special economic zone (SEZ) on the basis of «Sollers», in late July, Prime Minister Dmitry Medvedev said that the financing of the SEZ in 2016 will amount to 3.5 billion rubles.
Managing Partner EURussia Partners Ivan Bonchev notes that the search for a new partner to «Sollers» will be difficult: to end the agreement on industrial assembly remained for three years, at the same time «the market hard, fast recovery is not expected.» Small parties began a joint venture to produce cars in the mode of SKD as a step towards the further development of production, says the expert, but now «Sollers-Bussan» on an agreement on industrial assembly need to increase the localization, but neither side was going to make additional investments. Mr. Bonchev believes that similar termination of the contract can be expected from other Far Eastern project «Sollers» — Mazda and SsangYong.
Source — «Kommersant»