Russian car maker IzhAvto plans to focus production on the Kia Spectra model, the company’s general director Mikhail Dobyndo said in an interview with the Vedomosti business daily cited by the Prime-Tass news agency.
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IzhAvto is part of the Samara-based SOK Group which, earlier this week, said it would start mass production of the Spectra from August 1.
SOK would announce later what other Kia models will be assembled.
Investment in Spectra production totals $US62 million-$63 million, 28% from the company’s own funds.
Dobyndo said another $2 million – $3 million would be needed “to modernise the current infrastructure.”
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By GlobalDataThe cars are built under licence, without any investment from South Korea’s Kia Motors. He said that his company in future would either expand its partnership with Kia, or find another partner but no talks are under way with other foreign companies.
“IzhAvto is open for talks. We are not bound by any obligations to Kia Motors. Gradually we have become a multi-brand company, as we produce cars under the VAZ, Izh and KIA brands. And I do not exclude the possibility that in future we will start assembling cars under another brand,” Dobyndo said, according to Prime-Tass.
Dobyndo said that of the 400,000 foreign cars sold in Russia in 2004, the Spectra accounted for 300,000.
“The main competitors are the Chevrolet Viva, Hyundai Accent, Hyundai Elantra, Ford Focus and others. But we have deliberately targeted the $10,000 to $15,000 price bracket,” Dobyndo said, declining to announce the price until late April or early May.
A pilot batch of base model Spectras was sold at $13,000 each and the base model could be sold for $10,000.
Even the base model would come with two airbags, central locking, power steering, electric windows, an adjustable steering column and a “bad road” package. These extras would add at least $1,300 to the starting price.
IzhAvto reportedly is targeting the KIA Spectra car at 20-40 year-old family men, with incomes of $300 – $500 per family member.
“We are going to develop consumer credit and lease programmes, and trade-in sales,” Dobyndo said, according to Prime-Tass.
He said that a serious advertising campaign is planned – the company has studied how the Spectra was promoted in the US.
Kia Motors controls sales and plans to sell 100,000 of its cars in Russia in 2008, including cars assembled locally.
Dobyndo also said that Russian car makers should gradually stop producing traditional Russian cars.
“To be frank, ‘classic’ Russian cars are very archaic. But we will continue to produce them while they still meet the minimum safety and emission standards, and while people keep buying them,” Dobyndo said, according to Prime-Tass, adding that 260,000-280,000 classic cars are still sold in Russia every year.
But in 2008 the company will have switched to Euro-3 [emissions] standards, which will lead to higher car prices, and it will be necessary to halt the production of ‘classic’ Russian cars in 2008-2009, Dobyndo said, according to Prime-Tass.
