GENEVA: ARAB NEWS
Published — Sunday 9 March 2014
Last update 9 March 2014 2:46 am
The developing crisis in the Crimea between Russia and Ukraine is casting a shadow over Geneva Motor Show this year as major manufacturers monitor the situation and hope it does not spill over to trade sanctions.
Russia is important for carmakers, with 2.78 million vehicles sold in the country last year.
By comparison, in 2013 consumers bought 2.95 million cars in Germany, Europe's largest market, and 2.26 million autos in the UK.
Automakers have spent billions of rubles to add factories in Russia in recent years after the government offered tax incentives in 2011 to set up local production.
Under rules set up at the time, carmakers are allowed to import components with no or very low duties in return for building at least 300,000 cars annually in the country.
General Motors operates a factory in St. Petersburg to serve the market, and the automaker is boosting capacity to build about 350,000 vehicles in Russia.
Daimler CEO Dieter Zetsche said: “The situation is changing by the minute, we are watching it closely."
This view was also echoed by many car executives at Geneva this week.