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Meeting with Minister of Industry and Trade Denis Manturov

February 25, 2019, The Kremlin, Moscow

Vladimir Putin held a working meeting with Minister of Industry and Trade Denis Manturov who updated the President on the non-financial sectors’ development results in 2018. They also discussed the situation in the automobile sector.

President of Russia Vladimir Putin: What do we discuss first, Mr Manturov? Industry in general or the automobile industry?

Minister of Industry and Trade Denis Manturov: As you like… Let us consider the overall situation.

Mr President, I prepared this material just in case, as a more informative illustration of the results of the year.

In general, we have positive results in all industries. The overall result was 2.6 percent growth in the manufacturing sector.

We certainly have champions: railway engineering, primarily growth in the production of freight cars, and road construction equipment grew to 23 percent. And I must say that we expect further growth.

The other industries showed growth from three to 12 percent. Chemicals and pharmaceuticals show stable growth at ten percent annually – an estimated result so far. And what is very important, we continue to work on increasing exports.

Vladimir Putin: Non-commodity exports.

Denis Manturov: Yes, non-primary energy exports grew by 11.6 percent last year, and in the industry, 10.2 percent, which amounts to $125 billion in money terms last year.

We are acting on your instructions and your executive orders as part of the national project for the development of international cooperation and exports. We have already developed all the necessary measures to ensure stable growth and to achieve the targets set for us by 2024 – to double exports from 125 billion to 250.

This is an ambitious task. Starting this year, we are intensively cooperating with the agencies responsible for individual national projects.

I am referring to healthcare, science, the digital economy, housing and the urban environment, the safety and quality of roads.

We expect that by integrating our industry into these national projects, we will increase production, as well as, most importantly, we will ensure a stable workload for the facilities.

This will mean jobs and stable wages at industrial enterprises, which is very important.

Our job now is to enhance labour efficiency. Overall, we scored a better than planned result last year: nearly 3 percent in the manufacturing sector.

But the leading sector is automobile manufacturing, where labour efficiency jumped by 16 percent. This is the result of many years of work, as well as state support and economic revival.

We believe that the other sectors, which are implementing modernisation and development programmes, will show similar ambitious results.

Vladimir Putin: The average wage in the sector is 41,000 rubles, am I right?

Denis Manturov: Yes, wages in the automobile sector are higher than in manufacturing as a whole. The average wage is 38,000, but it is higher in the automobile sector.

Last year we have overcome recession, and the market has grown to nearly 1.9 million vehicles. Our companies manufactured 1,752,000 vehicles.

Therefore, the production growth rate was 14 percent, which is higher than the market growth rate of 12 percent.

Vladimir Putin: Is Lada the indisputable leader?

Denis Manturov: Yes, definitely.

The demand is the highest for Lada Vesta and Lada Granta. Besides, our foreign colleagues continue to strengthen the presence of their brands on the Russian market.

Vladimir Putin: Are you referring to Hyundai and Volkswagen?

Denis Manturov: Yes, but these are Russian-assembled vehicles. Vehicles made in Russia account for 85 percent of the market.

As for the performance of state support programmes last year, we have good results to report for social programmes, which we have expanded as per your instructions to include the Russian Far East. In particular, subsidies on car loans have been increased to 25 percent of the cost.

Our goal is to gradually replace used right-hand drive vehicles, which are still brought into the Far East, with Russian-made cars.

Vladimir Putin: What about school buses and ambulances?

Denis Manturov: Yes, we can report progress in the manufacturing of both ambulances and school buses. We are also increasing the production of natural gas vehicles, just as you have instructed. We annually increase support for…

Vladimir Putin: Not rapidly enough.

Denis Manturov: Mr President, we are working in alliance with Gazprom, which is developing its network of natural gas fuelling stations.

The activity is higher in these regions in terms of support for municipal procurements, and commercial vehicles are being converted to natural gas fuel. Such vehicles are less expensive and more efficient if we take their entire lifecycle.

Mr President, on March 1, we will again launch the First Car and Family Car social programmes, which showed good results in 2018.

We have coordinated the volume of budgetary allocations with the Government for this year. We hope that this will help us increase the output and serve as additional support in the automobile sector.


February 25, 2019, The Kremlin, Moscow