As automobile factories in towns all over America close the shutters and fall silent, new factories are rising to take their place across the ocean.
In the most recent report of this international dichotomy, perpetual Japanese problem child Mitsubishi, orphaned by DaimlerChrysler
According to Russia's leading business newspaper, Kommersant, Mitsubishi likes St. Pete (or more specifically, the surrounding Leningrad region) in part because the city is quickly reaching critical mass as a hub of automobile manufacturing activity. Ford
It's no coincidence that so many of these new factories are rising out of the swamps of St. Pete. After all, if you listen to Ford and GM execs here in the States, their biggest beef in recent years has been the rising cost of gasoline and its impact on sales of their most profitable vehicles -- gas-guzzling full-size pickups and SUVs. But as gas-hungry as the U.S. is, the eastern stretches of Russia are just as gas- (or rather, crude oil-) rich. And in a real world example of trickle-down economics in action, it seems a fair amount of those Russian petro-rubles are filtering down to the car-buying public -- and car sales are booming.
Mitsubishi says it's still just window-shopping at this point, and hasn't yet decided to make a move to build in Russia. The company says it would need to sell at least 75,000 vehicles per annum in Russia for building a plant there to make economic sense. On the other hand, it sold 55,000 cars there in 2005, and that was an 83% year-over-year increase. If this rate of sales growth keeps up, Mitsubishi could have crested its targeted sales volume almost by the time you finish this column.
Who else is building cars in Russia? Find out in:
And who's not? Just DaimlerChrysler and Honda
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Fool contributor Rich Smith does not own shares in any company named above.