Intelligence for All Wheel Drive - Haldex

Riding high
on grow
As the Russian and Indian economies
surge forward, they bring into play a new
class of consumers, and global businesses
sense huge opportunities.
Text R.F. Mamoowala
Illustration Ladislav Kosa
Photo INA Agency
18 Haldex Dynamix 1/2007
Prudent macroeconomic management, a windfall
from rising oil prices and strong economic
growth over eight years – 7 percent in 2006 – have
brought Russia back into business.
At the World Economic Forum meeting in Davos, Switzerland,
in January 2007, the Russian delegation reported
that Russia’s gdp would soon overtake that of France.
In the fi rst nine months of 2006, the volume of foreign
investment in Russia increased by 55 percent, compared
with the same period in 2005, according to the annual
Global ceo Survey (of 1,100 ceos from 50 countries)
released by global accountancy fi rm PricewaterhouseCoopers.
“Russia remains the focus of great attention on
the part of investors all over the world,” the survey states.
It says also that for the fi rst time ever, in 2006 Russians
bought more foreign than domestic cars.
With highly valued natural resources, a strengthening
ruble, an educated and skilled workforce and rising wages,
the Russian economic scenario has never looked better.
Financial services, construction, retail and automotive sectors
are all booming.
“Top money spinners include groceries, beer and cars,”
says a recent editorial in The Economist, commenting on
Russia’s “demanding as well as aspirational” consumers.
The editorial points to ikea, which has spent 2.4 billion u.s.
dollars in Russia. It now has eight stores and runs eight
mega-malls.
“Russia has a potential for continued strong economic
growth due to its national resources, especially oil and gas,”
says Lennart Hammargren, Haldex sales manager for Eastern
Europe. The overall gnp growth will boost the infrastructure
sector, particularly road construction, generating
a huge demand for construction vehicles, and increased
trade with Western Europe will boost demand for long-haul
transport trucks and trailers.
As modernization of existing fl eets and improved maintenance
come into play, Hammargren says, “high-quality
products, safety issues and environmental concerns will
have a favourable impact on superior suppliers of vehicles
and components such as Haldex.”
Hammargren explains that historically Russia had
focused on domestic manufacture of all components, but,
he says, “gradually the more modern and successful manufacturers
are concentrating on their strong areas and opting
for partners/suppliers in others.”
IN 1915 GARPHYTTE BRUK – later Haldex – sensed the
potential of the Russian market early, setting up a wire
plant in Yekaterinburg in Central Russia in 1916. Two
years later it was closed because of the Russian revolution,
but Garphytte Bruk continued to serve the Russian market
from various European plants. From the mid 1990s, says
Hammargren, “sales have grown signifi cantly, and we’re
approaching the 15 million euro mark.” In 2006 Haldex
opened a sales offi ce in Moscow.
An important Haldex customer is Kamaz, the largest
Russian heavy truck manufacture. Kamaz makes 50,000
vehicles annually and plans to double this output in a
few years. As the bus and trailer markets grow, there is
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