Russian car industry switches to national currencies in settlements with Turkey

By  Trend

Russian automakers are switching over to settlements in national currencies with Turkey for the supply of components, as such plans have been declared by a number of companies, the Minister of Industry and Trade of the Russian Federation Denis Manturov told RIA Novosti.

Speaking about the automotive industry, the minister noted that the current volatility of the ruble reduces profitability of those companies which still lack proper level of localization, however, the companies aimed at a high level of localization and enhancement of the volume of export supplies, also depend on imported components to some extent.

"For example, the level of localization for the range of products of "AvtoVAZ" PJSC company, on average, is above 50%, but is not equal to 100%. Therefore, the presence of 10, 20 or 30% of imported components has a significant effect. Only the case of the Turkish lira is an exception, we are working separately in this direction now. We still purchase quite large volumes of components in Turkey, for example for AvtoVAZ and other companies, but we see less dependence here, and of course, we experience more dependence in the EU countries," Manturov said.

He said that Turkish manufacturers "are switching over to payments in the national currency with great pleasure."

Answering the question whether Russian car making companies are already paying for components in Turkish lira or are just planning to switch over to such settlements, Manturov said: "I will not tell now exactly whether our manufacturers have switched over to purchases in national currencies to date, because they are great in number, there are more than one hundred manufacturers. But at least a month ago, we talked with a number of manufacturers, they were planning to switch over in a little while."

"The transition to settlements in national currencies is always a risk hedging. The lira has weakened, the ruble has also weakened slightly. Such situation will be comfortable for us," the minister added.