One of the world’s top auto makers, Ford, is getting a taste of what the Russian market is like.
The company announced Thursday that it will sell 1,600 new, higher-value cars, a sign that the Russian economy is maturing after decades of stagnation.
The new cars are being built in Russia by a consortium led by Russia’s largest carmaker, Datsun.
Ford says the new cars will be priced at about $50,000 to $70,000.
Russia is now the world leader in making cars and, in a sign of how far the economy has progressed in Russia since the end of the Soviet era, the new products will be available from mid-October.
Ford and Datson, the world-renowned carmaker that was bought by General Motors in 2001 for $3.6 billion, have been struggling to keep up with demand for the cars.
In the last three years, Ford has sold only about 10,000 vehicles in Russia.
Datsan’s sales fell 7.9 per cent in 2015 and 8.4 per cent the year before.
“The current market situation is not as bad as we thought,” said Vladimir Kudrin, head of Datsons global business unit.
Ford’s new cars “will be able to satisfy our needs” in the next 10 to 20 years, he said.
The move will allow the company to compete in a market that has grown rapidly in the past few years, as the number of cars and trucks has grown dramatically.
The average value of a vehicle in Russia in 2019 was about $100,000, according to data from KPMG.
Diesels and other electrified vehicles will be more expensive to produce and will be the mainstay of the new vehicles, Mr. Kudrina said.
Diatessin Automobiles, Russia’s second-largest auto maker, announced it is building its own electrified vehicle, a sporty SUV, and has sold about 1,000 cars since it began selling the first one in 2016.
It plans to build about 6,000 more vehicles over the next three years.
“It’s good for us because we can produce more vehicles,” said Nikolai Diesinskiy, chief executive of Diatons vehicle division.
“We can build them all the way to the market, which will allow us to compete with global competitors.”
Russia’s economic growth, which has been sluggish since the collapse of the USSR in 1991, has been a boon to Ford.
The car maker has sold 1.7 million vehicles in the country, up more than 11 per cent from a year ago.
The Russian government has boosted fuel subsidies to keep prices down.
The government recently approved a 10-year plan to raise $3 billion for infrastructure and education.
Russian Prime Minister Dmitry Medvedev, who has a close relationship with Russian President Vladimir Putin, has also touted the new investments.
“I am convinced that the development of the Russian auto industry will accelerate the country’s development,” Mr. Medvedav said in a statement.
Mr. Putin has said he wants the new factories to create jobs and help revive the economy.