STATUS OF THE USSR'S KAMA RIVER TRUCK PLANT (S-3567)

Created: 3/23/1971

OCR scan of the original document, errors are possible

CIA HISTORICAL REVIEW mwu

RELEASE AS SANITIZED

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The llonorabla Robert L. He Loll an Aaaiotant Secretary lor Donoatlc

and Intarnatioaal Buainaaa Dopartment of Consseree

Doer Bobi

Tha attached brief Maoraxvdms covers tha recant davelopaanta with respect to tha Soviet Xaaa Rlvar Truck Plant.aaa claar tbat tha Sovloto will build tha plant theaaalvaa and that the ax*ount of western participation will dapend on tha ootooroo of toughori iatlon

Sincerely,

Diractor Economic Reaaaroh

Attachment i

Memoranda* rai Statua of

the DSSR'a Kana Rival Track Plant

MEMORANDUM

Status of tha USSR's Roma River Truck Plant

plansarge truckto ba built with western assistance havabeyond tha Soviats' original projolantrucks annuallyand This delay can be primarilyMoscow's faulty assessment of the attractivenessdeal could be expected to hold for Western. Also, there wore differing priorities within

the Soviet economic hierarchy, particularly over spending foreign exchange. In addition, the Soviets probably failed to appreciate the lessons Western firms would learn from Fiat's trying experience in buildingutomobile plant at Togllatti.

ebuff from the Ford Motor Company last year, the USSR approach has cento red on Dalnler-Benx of West Germany. Like Ford, Daimler-Bens has now declined to assume major responsibility for the complex. Other Western firms including Flat and Renault eliminated themselves from consideration before the Sovietsthey would offer thesehance at major participation.

Xt is clear that the Soviets now plan to build the plant themselves, although they are counting on substantial inputs from the Hoot in tones of equipment and components. Discussions to this end are continuing.

Recent negotiations with Dainlor-Banz hava centered on licanses for five types of truck motors, but these talks have now reached an impasse becanso

of basic differences over fees and the question of Soviet sales of vehicles in third country markets. Moscow has offered only one-third of5 million fee requested by Dairaler-Benz. tatementress conference by the Soviet minister of the motor vehicle Industry that Moscow considers Daimler-Benz1 price to be "too high"

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suggests there la little givo in the Soviet position. Similarly, tho USSR refuses to agree not to sell Karan River trucks in Daimler-Benz* traditional trtrketstipulation Daimler-Bens insists upon. staler-Be ok, it should be noted, is not greatly conceited about eventual Soviet competition ln third countries because of the long-term domestic demand in tho USSR, the quality reputation of Daimler-Bent trucks abroad, and the probable obsolescence of Kama River truck if and when they are ever offered in the free world.

CXA/OER

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