Russian Automakers Mull Luxury Brand to Rival BMW, Mercedes

Currently, Russian brands such as ZiL build armored sedans for top government officials. Industry and Trade Minister Denis Manturov said he wants automakers to build luxury cars that target a broader market.

Manturov has asked Moscow-based ZiL and Marussia Motors, and the Nizhny Novgorod-based GAZ Group, to develop manufacturing proposals for a luxury car brand, promising state support for the project, Manturov told the government's official newspaper, Rossiiskaya Gazeta. "I hope that by the end of the first half we will have a vision of which scenario we want to take," he said.

ZiL spokeswoman Tatiana Lomakina said the company is currently focused on building an armored limousine for President Vladimir Putin. ZiL could, however, rethink the approach if there is a market demand, she said.

A GAZ spokeswoman declined comment on the project until the government chooses a model. A Marussia spokesman said only that the carmaker is working on the proposal.

Premium car sales boomed in Russia last year with BMW and Mercedes-Benz in a close race for leadership followed by Audi. BMW brand's 2012 sales were up 33 percent to 37,515 units, while Mercedes-brand sales increased 29 percent to 37,436 and Audi's volume grew 44 percent to 33,512, according to the Association of European Business in Russia.