Automobile Cluster in St. Petersburg.

Structure and development directions

Andrew A. Markin Head of department of the St. Petersburg state institution

“The Centre for business development and support”

Investment attractiveness of St. Petersburg

1

Developed technical research and study centre in areas: - mechanical engineering industry - metalwork - applied chemistry

Russian logistics centre insures delivery of materials and components: - all transportation ways into Russia - all transportation ways inside Russia

Existed special industrial zones and technological clusters in St. Petersburg area

Presence tax privileges for investments in manufacturing, including automobile manufacturing

St. Petersburg government support in development of manufactures of automobile cluster

Industrial zones of St. Petersburg

2

Shushari-2 Maryino Beloostrov

Space - 1859,8 ha Average rate of ground tax:

14,58 RBL/sq.m. per year Average redemption price:

132,84 RBL/sq.m. In the area:

manufacture of cars, equipment and machines,

warehouse facilities

Space - 264 ha Average rate of ground tax:

14,76 RBL/sq.m. per year Average redemption price:

132,84 RBL/sq.m. In the area:

manufacture of cars, electronic, optical and special

equipment

Space – 218 ha Average rate of ground tax:

21,29 RBL/sq.m. per year Average redemption price:

191,61 RBL/sq.m. In the area:

manufacture of cars, electronic, optical equipment,

computation

St. Petersburg industrial zone handbook: http://cedipt.spb.ru/investments/materials/3024/

3

Industrial zones of St. Petersburg

ZVEZDA, JSC

LENPOLIGRAPHMASH, JSC

Space – 3000 кв.м. Average rate of ground tax :

6000 RBL/sq.m. per year Назначение:

assembly manufacture, office premises

In the area : stockroom,

molding of plastic, tool and machine-assembling

manufacture

Space – 35 га Average rate of ground tax :

3300 RBL/sq.m. per year - industrial premises,

8500 RBL/sq.m. per year – office premises

In the area: foundry manufacture,

machining, assembly shop,

test stands

4

Property tax rate is set to zero for a period of 5 years, if:

Obligatory conditions Investments, mln RBL

Period of investments throughout 3 years

Manufacturing plants More than 800 Since 01.01.2010

80% of incomes – sales revenue of hi-tech products of own production More than 50 Since 01.01.2010

Obligatory conditions Investments, mln RBL

Period of investments throughout 3 years

Manufacturing plants More than 800 Since 01.01.2010

Investment tax privileges for residents of St. Petersburg

Profit tax rate decreased up to 13,5% for a period of 5 years, if:

Automobile cluster in St. Petersburg

Mobis module cis, Saint-Petersburg, Kamenka

Nissan, Saint-Petersburg, Kamenka

Toyota Boshuka Saint-Petersburg, Shushari

ММК-Intercos, Saint-Petersburg, Kolpino

Scania, Saint-Petersburg, Shushari

Johnson Controls, Saint-Petersburg, Shushari

Magna Russia, Saint-Petersburg, Kamenka, Kolpino, Shushari

5

General Motors , Saint-Petersburg, Shushari

Hyundai, Saint-Petersburg, Kamenka

Eberspacher Saint-Petersburg, Rzhevka

1st stage 2005 - 2010 Objective Creation of automobile manufacturing plants with a purpose to form the

centre of automobile cluster

Plan Construction and launch of manufacturers

Result Opening of plants of global automobile manufacturers and appearance of global suppliers of components

Stages of development of automobile cluster in St. Petersburg

2nd stage 2011 - 2020

Purpose Increase in tax revenues, use of scientific and industrial potential of a city

Objective Increase of regional localization level Development of R&D centers

Plan

Introduction of modern innovations and advanced organization of work process Introduction of regional professional training system Development of industrial production with high added value (technological requipment of enterprises) Transition from localization tactics to export strategy of components Scientific research institutes and high schools involvement in R&D

Planned results

To produce 1 million cars in 2020 year To increase components production up to 4 billion USD To bring localization level up to 60 %

6

Prognosis for 2011 – 2015 years*

Cars Manufacturers production, K units

Autocluster sales, billion RBL**

7 ** - manufacturing prices

* - Tax revenues in budget of St. Petersburg in 2010 – 634,6 mil RBL

257,1 360

417 483

655

318,8 421,8

562 592

724

0

250

500

750

2011 2012 2013 2014 2015

Production capacities,K units

Cars launch,K units

197,3 268,9

327,1 404,9

548,7

199,4 279,8

343,8

428,9

587,6

0

200

400

600

2011 2012 2013 2014 2015

Autocluster sales,optimistic scenario,billion RBL

Autocluster sales,basic scenario,billion RBL

Programs to support automobile cluster in St. Petersburg

Plan of measures to develop and support of small

business in St. Petersburg in 2012-2015

The program of

innovative-

technological development

of St. Petersburg

in 2012-2015

In new “Industrial assembly-2» conditions the Government of St.-Petersburg will continue active assistance to development automobile cluster

Manufacturers of cars and components The complex

program of actions to realize the innovative policy in St.-Petersburg In 2012-2015

Comprehensive

programme

of development of

St. Petersburg for

2012 – 2015

«Science. Industry.

Innovations»

8

Measures of state support of small and medium business, participating in

"Localization" program

9

Leasing payments More than 50 % of

industrial expenses are compensated for payment of

first contribution (up to 500 K RBL)

Interest rate under the bank credit

The expenses connected with payment of interest

on credit are compensated up to 90 %

University of small business

Manufacture and production certification

Up to 50 % of made expenses are compensated

(not more than 350 K RBL)

Connection to electric networks Up to 50 % of made expenses are compensated at connection

to 500 kw power

Technological foreign training The organization of training on

advanced hi-tech manufactures with free participation and residing in

territory of the foreign states

Improvement of professional skill, preparation and re-training of personnel

with partial payment (not more than 2/3) of training program costs

State support measures of creation and opening of the research centers

10

Co-financing of expenses for training of scientific shots in the leading foreign companies

Co-financing of research and developmental works on subjects of high schools, made by car manufacturers (co-financing of Contracts between high schools and cars manufacturer)

In case of launch of product – assistance in commercialization within support of “Localization“ program

Human Resources formation in car industry

Curriculums establishment (including work practice)

Processing of demands and methodological work

Enterprises

Educational institution

11

Objective to form Human Resources W

ork

prac

tice

Training evaluation

Thank you for you attention!

Andrew A. Markin, Head of department of the St. Petersburg state institution

“The Centre for business development and support” tel.: +7 (812) 417-31-34

mob.: +7 (931) 326-55-17 e-mail: markin@crpp.ru