New Investments Boost Suppliers' Optimism, But Also Increase Overcapacity Fears

An increasing preference for foreign brands in Russia and the government's offer of duty-free imports into the country - conditional on a minimum 30% local content level - have prompted US-based General Motors Company (GM) to announce a hefty US$1bn investment that will go towards doubling its local manufacturing activity by 2015. The move supports two of BMI's long-standing views that domestic demand potential will turn Russia into a battleground for foreign players and that such investments will aid in the development of a highly integrated network of foreign suppliers. However, commitment to such large-scale production gives us further room

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