BMW may abandon plans to build a plant in Russia,media reported. BMW has been in talks with Russian government officials for a year and a half, but failed to reach an agreement because of inconsistencies with the federal government’s economic incentive standards, according to Stefan Teuchert, BMW’s Chief Executive officer in Russia.
“THE BMW GROUP BELIEVES THAT LOCAL PRODUCTION IS IMPORTANT AND NEEDS TO INVEST IN THE RUSSIAN MARKET, AND IF IT CANNOT FIND A COMMON LANGUAGE WITH THE RUSSIAN GOVERNMENT, IT CANNOT AGREE ON INVESTMENT TERMS THAT CAN CREATE BENEFITS,” STEFAN TUSSHE SAID. As a result, BMW has refused to sign any manufacturing projects with the local government.
The CEO of Avtor, a local Russian brand, a partner of BMW, said the company would have to leave Russia if it failed to sign an agreement with the government to develop a new plant.
According to the European Enterprise Institute, Mercedes-Benz is the best-selling luxury brand in the Russian market in 2019, with BMW in second place. However, Daimler set up a factory near Moscow last year.