Rouble collapse buffets Asian carmakers' big Russia bets
By Hyunjoo Jin and Samuel Shen
SEOUL/SHANGHAI Dec 17 (Reuters) - Asian carmakers who bet big on expanding in Russia face a test of their commitment to a market they once hoped was set to surpass Germany's by size as the rouble plunges and auto sales skid.
Manufacturers including Japan's Nissan Motor Co, China's Great Wall Motor Co and South Korea's Hyundai Motor and its Kia Motors affiliate have been stepping up investment in Russia in recent years and are gaining market share there at the expense of European and U.S. rivals.
But the rouble's sharp fall this week on tumbling oil prices, which brought its losses against the dollar this year to about 50 percent, leaves their near-term prospects there looking decidedly bleak.
Late on Tuesday, China's Geely Automobile Holdings Ltd , whose parent Zhejiang Geely Holding Group owns Swedish brand Volvo, warned that its profit this year would roughly be halved, partly as a result of foreign exchange losses in Russia.
Geely, whose Russian sales have slumped 49 percent in the first 11 months of 2014, said it was raising prices in the country and had begun "to restructure its Russian operations with an aim to reduce its financial risks".
Even before the rouble's recent slide, Russian car sales were forecast to drop 15 percent this year and a further 4 percent next year, according to Hyundai and Kia's in-house think tank, which expects overall Russian sales this year of 2.37 million, compared with 3.25 million in Germany.
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