The conference was attended by top managers of Russian and foreign car-making companies. They have discussed current situation in the automotive market in Russia and considered new production projects as well as development strategies for the 2003. According to Vadim Shvetsov, Severstal-Auto’s general director, Severstal-Auto will pursue both the strategy of building up its own assets as well as that of implementing joint projects with one of the leading international car-makers.

The company is considering opportunities for making a foreign brand of an off- road vehicle, light truck and minibus, priced at above US $ 10,000 in partnership with a foreign car manufacturer. Besides that, Severstal-Auto intends to work with Western producers to make a foreign brand of engine at ZMZ and foreign-made components at UAZ and ZMZ.

The strategy of independent development involves modifying the existent product line and launching new off-road vehicles and trucks, priced at US $ 6,000-8,000.

According to Vadim Shvetsov, carrying out this strategy will allow to increase the lifetime of the traditional product line for additional 5-8 years and introduce new products with improved consumer, environmental safety characteristics and better value-for money, thus making them competitive against foreign-made used cars.

Today Severstal has adopted a program of long term cooperation with UAZ for 2003-2004. Several new grades of steel are being mastered. Hot dip galvanizing sheet is shipped to UAZ for use in corrosion resistant components of UAZ 3160 and 3162.

Besides that, Severstal develops a program of using new preservative and preservative technology materials in the cold rolled steel production. Therefore, a special technological lubricant, serving as a stamping liquid, will protect an automotive sheet from corrosion and assure light stamping of parts. On top of that, the use of this lubricant will allow to remove the remains of lubricating materials from metal’s surface, assuring high quality of painting. Severstal has been working on this project together with Quaker Chemical since September 2002. It has shipped a test lot of the product to AvtoVAZ for testing. After testing the decision was made to start regular shipments of steel to AvtoVAZ. In March of this year 350 tonnes of cold rolled steel made by means of this lubricating technology were shipped to the automotive plant.

The next step of cooperation involves mastering of new products for the automotive industry - production of microalloyed grades of steel, which don’t require additional processing such as tempering at the automotive plant.

19 March 2003