Research Notes

Severstal-Avto is Russia's automotive company that first succeeded in rolling out large-scale international cooperation ties and launching production of foreign makes in the country. As Severstal-Avto moves one step ahead of its rivals, it is now operating in the fastest growing and high-yield segments of the automotive market. In addition, the company does not lean on its laurels and powers ahead, striving to produce higher value-added products, which will push up the company's market cap.

• The company turns out a wide range of SUVs under both Russian and foreign brands which are in stable demand in Russia owing to the insufficiently developed road infrastructure.
• Severstal-Avto is now on the verge of breaking onto the growth segment of commercial vehicles, offering foreign autos at acceptable prices thanks to the assembly operations conducted domestically.
• The company is rapidly rolling out its dealer network, which will enable it to improve the quality of customer services and attract new consumers.
• Construction of a new facility in the free economic area will make it possible to realize major tax savings.

The transparent structure of the company's equity capital and the presence of only one majority shareholder allow Severstal, on the one hand, to achieve efficient management at the group's enterprises and, on the other hand, create a minimum of risks for minority shareholders.

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Konstantin Romanov

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