What can we expect from Mikhail Prokhorov's new car?
The price and characteristics of Russia's grandiose plans to manufacture a new car were disclosed yesterday. Mikhail Prokhorov unveiled his plan for a "low-budget city car" to Prime Minister Vladimir Putin during their meeting on Tuesday. It turns out that the car will not be as low-budget as it seems.
Mikhail Prokhorov intends to use new technologies in his car and start production on a "completely new basis." Another way to put this is to say that he does not intend to use existing facilities for manufacture. Vladimir Putin liked the idea and called for agreement on it by all the related ministries and government bodies as soon as possible (see Izvestia of 20.01.2010).
Prokhorov plans to manufacture the car jointly with St. Petersburg's Yarovit Motors. The car will be designed "from scratch" without using existing platforms. It will be a construction set of components that can be used to assemble a sedan, a hatchback, and a cabriolet. A four-door estate car will be the basic variant.
The most interesting possibility is that the car will be powered by a hybrid engine. In fact, it will be an electromobile with a small and efficient petrol engine producing the power. However, standard petrol engine variants are also being considered.
Investment amounts are still unclear. It usually costs at least $250 million to start manufacturing such a car, and considering the expenditures on developing and certifying the car, it can cost up to $1 billion.
As for the price, things are not so optimistic. It is estimated at 8,800 Euros or 371,000 roubles. Not a "people's" price. For example, a Lada 2106 costs about 160,000 roubles, and even a foreign Renault Logan can be bought for 175,000 roubles.
"A car for 370,000 roubles can hardly be called a 'people's' car. It is more expensive than the Daewoo Matiz or the Lada Kalina. If the car costs 30% to 50% less, then it can be considered a 'people's' car in Russia. The country needs such a car. It will not only improve the population's quality of life but will also be a powerful driving force for the development of related industries. Government support in the sphere falls perfectly in line with the strategy for developing the country's economy," Konstantin Romanov, analyst for Finam investment company, believes.
We could not reach Yarovit Motors for comments. ONEXIM's spokesman Igor Petrov refused to comment on the plans.
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Do We Need a "People's" Car for 9,000 Euros?
PRO
Igor Korovkin, Executive Director of the Association of Russian Automakers:
"You can't build a car like this at a cheaper price. The hybrid engine itself is very expensive since it has a large copper content. The car's price consequently grows by 30%, but it is necessary in terms of environmental protection since the car is intended for the mass market. We have to provide employment for Russian companies rather than foreign ones. Sales of 2 million cars per year seem rather plausible for a project like this. The idea is very good."
CONTRA
Sergei Udalov, Deputy Director General of Avtostat automobile statistics company
"I don't think that a company that hasn't ever been in the automotive industry can build a car for the mass market. You can't cover the distance that car manufacturers spend tens of years traveling in a short period of time. And 8,800 Euros is not the proper price for a people's car. Finally, the profit margin is very low for cars like this. That's why only large car manufacturers like Volkswagen, Toyota, and Renault-Nissan can afford it. A mistake can amount to an enormous financial loss.
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From Volkswagen Beetle to Tata Nano
The USSR had experience in building affordable cars. Manufacturing of the Oka was simultaneously commissioned at three car factories – in Naberezhnye Chelny, Togliatti, and Serpukhov – in 1988. The world has already become accustomed to "cars for the people." The Volkswagen Beetle or the Smart are good examples. In 2008, the whole world discussed the Indian manufacture of the cheapest car ever available to the public. The small Tata Nano cost $2,500. However, its variant for the European market will be loaded with options and will cost at least twice as much, which is still cheaper than the one Mikhail Prokhorov has proposed.