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History of automotive in Russia
Automotive production is a significant industry in Russia, directly employing around 600,000 people or 1% of the country's total workforce. Russia was at Nr 15 of car producing nations in 2010, and accounts for about 2% of the worldwide production. In 2009 the industry produced 599,265 cars, down from 1,469,429 in 2008 due to the global financial crisis, and 1,895,474 vehicles in 2014. The largest companies are light vehicle producers AvtoVAZ and GAZ, while KamAZ is the leading heavy vehicle producer. Eleven foreign carmakers have production operations or are constructing their plants in Russia.
History As early as in the eighteenth century Ivan I. Polzunov constructed the first two-cylinder steam engine in the world, while Ivan P. Kulibin created a human-powered vehicle that had a flywheel, a brake, a gearbox, and roller bearings. One of the world's first tracked vehicles was invented by Fyodor A. Blinov in 1877. In 1896, the Yakovlev engine factory and the Freze carriage-manufacturing workshop manufactured the first Russian petrol-engine automobile, the Yakovlev & Freze. Yakovlev & Freze (1896)
History Romanov also constructed a battery-electric omnibus. The driver of the car, Andrei P. Nagel, was personally awarded by Emperor Nicholas II for increasing the prestige of the domestic car brand. Hippolyte Romanov's electric bus in Gatchina
Post-Soviet adjustments The Soviet Union possessed a large automotive industry. In late 1987, the industry produced 2 million cars, satisfying 45% of the domestic demand. But after the dissolution of the Soviet Union Russian automakers were integrated into a market economy and immediately hit by a crisis due to the loss of financial support, economic turmoil, criminal activities and stiffer competition in the domestic market during the 1990s. Some of them, like AvtoVAZ, turned to cooperation with other companies (such as GM-AvtoVAZ) in order to obtain substantial capital investment and overcome the crisis. By 1993, total output was down 14% compared to 1990 levels. Lada's declining sales during the 1990s, and toughening Lada had enjoyed particularly strong sales in Britain, peaking at more than 30,000 sales a year in the late 1980s, but had failed to remain competitive with other budget brands over the subsequent few years. In 1997, the production of cars in the Russian Federation increased by 13.2 percent in comparison with 1996 and achieved 981 thousands. AvtoVAZ and UAZ extended their output by 8.8 and 52 percent respectively, whereas KamAZ doubled it. The AvtoVAZ assembly line in 1969
2000 to 2008 In the early 2000s, the Russian economy recovered. Macroeconomic trends were strong and growing incomes of the population led to a surging demand, and by 2005 the Russian car market was booming. In 2005, 1,446,525 new cars were sold, including 832,200 Russian models and 614,325 foreign ones. Foreign companies started to massively invest in production in Russia: the number of foreign cars produced in the Russian Federation surged from 157,179 in 2005 to 456,500 in 2007. The value of the Russian market grew at a brisk pace: 14% in 2005, 36% in 2006 and 67% in 2007—making it the world's fastest growing automotive market by 2008. The total numbers of cars and trucks produced in Russia between 2000–2011. The Russian automotive market boomed in 2005–2008.
Global financial crisis Russia's automotive industry was hit hard by the late 2000s recession. Production of passenger cars dropped from 1,470,000 units in 2008 to just 597,000 units in 2009. Lorry production fell from 256,000 to 91,000 in the same period. In late 2008, the Russian government introduced protectionist measures, worth $5 billion, to improve the situation in the industry. This included $2 billion of bailouts for troubled companies and $3 billion of credits for buyers of Russian cars. Prime minister Vladimir Putin described the move as vital in order to save jobs. President Vladimir Putin meeting with AvtoVAZ employees in the company's factory in Tolyatti.
Recent developments By the end of 2010, automotive production had returned to pre-crisis levels. Nine out of the ten most sold models in Russia in 2010 were domestically produced, with Avtovaz's Lada models topping the list. In the first 7 months of 2010, sales of Lada cars increased by 60%, the Korean KIA reported a jump of 101%, and Chevrolet's sales rose by 15%. In 2010, Russia was the world's 15th largest producer of cars. The Russian automotive industry currently (as of 2010) accounts for about 2% of worldwide car production.
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