Back from the
brink and big
in Russia
The Chrysler Story
Since the start of the millennium, OEMs have been
gathering in Russia to benefit from Russia's skilled labour,
material and energy costs, which are only one-sixth of
those in Europe. The economy had recovered from its post-
Soviet Union slump and the government needed to
safeguard the local market whilst encouraging foreign
investors, something which has been particularly
efficacious in Kaluga. Following the global recession,
Prime Minister Vladimir Putin took a personal interest in
the automotive industry, announcing protectionist actions
bailouts for distressed companies and raising tariffs for
automotive imports, linked to engine size of the vehicle –
to hurry the market to pre-crisis levels. Russia now stands
on the brink of greatness with the opportunity to grow and
outperform the presently-stagnant established areas of the
automotive industry.
The complications of logistics into, and within, Russia
over the years have come in many forms – from bad
weather and road conditions to customs corruption and
trilateral transit licenses – and the Chrysler Russia supply
chain has also managed the integration of the Fiat
business in October, 2011. Despite Chrysler parting from
Daimler in 2007, the change happened ‘seemingly
overnight’ as the number of dealers the then General
Director of Russia John Stech, had to handle went from 13
to over 100. They gained a second parts warehouse, two
more logistics routes and an extra 72 employees in five
months. The blending of two corporate philosophies has
proved a triumph, as Chrysler has shown year on year gain
since 2009 and Sergio Marchionne pursues investment in
Chrysler shares.
Having started working for Daimler Chrysler as Team
Leader of the Regional Sales Managers team, Oleg Shamba
has since spent five years as Head of Vehicle Logistics for
Mercedes-Benz Russia, before returning to Chrysler Russia
in December 2011. He says, “Of course there were some
rough patches, such as transition to a new, larger parts
warehouse and an all-new SAP system. From a day-to-day
perspective the continued increase in Fiat-held Chrysler
shares does not have much effect. The Fiat and Chrysler
teams have goals and priorities and these are not affected
by ownership.”
Chrysler Russia uses Fiat purchasing policies, as it is
aligned to the Regional EMEA office in Turin, Italy, and the
acclaimed Dodge Dart is based on an Alfa Romeo platform,
showing the extent and attainment of shared technology.