Audi 2006 Annual Report Download - page 28

100,000 new cars are registered
each year in Moscow. Red Square
(above) is one of the few places
where traffic is excluded.
Milestones in
the emergence
of a giant
trading partner
As the biggest territorial
state in the world, Russia
has rich gas and oil re-
serves. The resulting
revenues enable Russian
managers to go on a
shopping spree in the
West in an effort to shore
up the cyclically exposed
raw materials trade.
Meanwhile, Russia’s
influence on the global
economy is growing
along with its admission
to the World Trade Orga-
nization (WTO).
26 AUDI 2006 ANNUAL REPORT
Communist regime was finally consigned to the
history books, it left behind it a mass of impover-
ished citizens and a tottering giant by the name
of Russia. Its efforts to make the switch to a cap-
italist system were fraught with pitfalls. The
country long remained the continent’s problem
child: deeply in debt, wayward, and dependent
on outside help.
Russia’s image has undergone a transformation
Russia has paid off its debts, is brimming with
confidence, is disdainful of outside interference
and yet is an attractive proposition for investors.
What has happened? First of all, there have been
political changes. In 2000, the successor as Presi-
dent to the ailing Boris Yeltsin was Vladimir Putin.
The Russian economy has undergone a radical
change during Putin’s time in office. The state
has promoted a huge process of concentration.
The gas monopoly Gazprom has taken over Sib-
neft, the oil company of the fabulously wealthy
Roman Abramovich. The state oil company Ros-
neft has succeeded in gaining control of large
chunks of Michail Khodorkovsky’s Yukos Group.
All this has been fuelled by the urge for
“strength in size”. Russia’s top companies have
never made any secret of their ambitions: they
want to be among the world leaders. Whereas
Western ears were still unaccustomed to names
such as Lukoil, Severstal and Norilsk Nickel as
recently as a few years ago, they are now recog-
nised as competitors to be taken deadly serious-
ly. Lukoil’s ambition is to become the largest oil
company in the world, Severstal the second-
largest steel producer, and Norilsk Nickel aims to
secure the rank of the world’s biggest mining
company. And Russia’s largest group, Gazprom,
is on course to becoming the world’s leading
energy company. The company is already the
biggest gas producer in the world and boasts
impressive figures: market capitalisation of al-
most 200 billion euros at February 2007, and a net
profit of almost six billion euros in 2005. All this
leaves Gazprom’s managers with ample cash for
a few shopping excursions. They are on the look-
out for investment targets particularly in Western
Europe, because Gazprom now craves red meat –
in other words, lucrative end-consumer business.
The British, Germans and Italians are ill-
prepared for this onslaught. They have grown
accustomed to the cliché of rich Russians jetting
around the world in the company of leggy