From tragedy to tragedy: where is the Russian auto industry heading?
Our Volga
Growth that didn't meet expectations
People in Russia love cars – it’s very difficult to argue with that. Russians are ready to buy cars even in such difficult times and at very ambiguous prices. Our consumer is also quite picky. Characteristic story with Iranian cars, which were never allowed onto the Russian market.
Iran, of course, managed to create a sovereign auto industry, but the quality and appearance of the cars left much to be desired. One should not exclude the fear of competition between Persian small cars and the Granta line from Tolyatti.
As a result, the country's domestic market is at the disposal of Chinese manufacturers. With small reservations, without which it’s impossible.
First, let's try to answer the question - how to provide our fellow citizens with inexpensive but high-quality cars?
In fact, everything is extremely simple - it is enough to reduce customs duties as much as possible. When you find out how much some Chinese or Korean crossover costs in your home country, you just get teary-eyed at the prices at a Russian car showroom. Our popular Geely Tugela costs more than three million rubles, but at home, even in the top configuration, it costs no more than one and a half million rubles.
Duties and all kinds of fees (for example, recycling fees) can raise the price of a car imported from the Middle Kingdom by 2-3 times. In fact, these are protective duties, but the specifics of the Russian market are such that they will be charged at these prices. Therefore, the recipe for the dish “every Russian has a personal car” is very simple - we reduce fees at the border, and buyers simply sweep everything off the shelves.
Currently, the market capacity is estimated at 1,4–1,6 million cars per year. With the abolition of duties, annual sales will easily jump to two million or more. Who would refuse a Chinese sedan with a guarantee and a full package of modern options at a price of up to one million rubles? For example, the Lada Granta and the ancient, dinosaur-like Niva Classic cost approximately the same.
Zeroing customs duties is good for everyone. Consumers receive an inexpensive product, car dealerships make good money on sales and service, the entire service infrastructure is growing - repair stations, refineries, spare parts stores, etc.
There is only one drawback to this scenario - domestic automakers die instantly. Avtovaz, first of all, because it was unable to organize the production of competitive cars. For various reasons, but failed. UAZ will survive for some time on defense orders, but it will also live for a long time.
The death of car factories means not only the absence of sovereign cars in showrooms, but also gigantic queues at labor exchanges across the country. The automotive industry is a network of thousands of small manufacturers working for the main assembly line in Tolyatti and Ulyanovsk. Starting from steel rolling mills and ending with tire factories.
As a result, no one needs such a scenario for nothing, so the state has to balance on the brink. On the one hand, do not raise customs duties, and on the other, try to provide Russians with high-quality and relatively affordable cars.
This didn’t start now, but in the 2000s, when the government brought automakers from all over the world into the country. But with the condition of maximum localization of production. This is how the factories of VW, Hyundai, Renault, Ford, Mercedes-Benz, BMW and many others appeared. Some assembled in full cycle, while others only twisted with screwdrivers.
And here the first tragedy of the domestic automobile industry occurred - the total takeover by imported technologies. Why develop your own design school in Tolyatti if Renault-Nissan will bring everything and teach everything itself. Shortly before the special operation, the French were supposed to kill the Vesta platform and actually transplant all Ladas onto Renault chassis.
The design headquarters in Tolyatti was abolished for a modest department for fine-tuning imported equipment to Russian realities. By 2030, no one in Russia would be able to develop passenger cars and put them on the assembly line.
Call it what you want, but this is an example of sabotage on a national scale.
Lada Iskra. Source: procrossover.ru
And now they have not completely moved away from “mutually beneficial” cooperation with the West. For example, Avtovaz is now preparing a new Lada Iskra, which is built on the sanctioned Renault Logan platform. Only now the French, of course, have nothing to do with it.
It should be separately noted that in Russia it is now very labor-intensive and expensive to create cars from scratch. Estimated costs reach 3–4 billion dollars and require 3–5 years of work. This is how Western and Asian concerns work, which have no problems with access to qualified design engineers and technologies. We have big problems with this.
Estimate how much time it took simply to organize the assembly of Chinese ABS - Itelma launched a plant in Kostroma in July 2023. And they plan to make airbags in Russia only in 2025.
Hello China and thank you
In Russia there is not a single car developed from scratch. Vesta, like Granta, traces its ancestry back to the VAZ-2108 of the early 80s. And even the Niva Travel, which was previously called the Chevrolet Niva, and even earlier the VAZ-2123 Niva, also comes from the mid-80s. Only the model was brought to mind in the new Russia.
Aurus can be considered the only car assembled in Russia inside and out. Only it costs several tens of millions of rubles, is produced in very few units and only confirms the lack of competence in the mass passenger car industry.
Therefore, all the talk about the revival of the Moskvich and Volga brands is an attempt to win over the buyer with nostalgic names and confuse Western villains. Russians are offered Chinese consumer goods under Soviet sauce in the hope that the Americans will not impose sanctions against suppliers. You see, they won’t figure it out or they’ll just close their eyes. For example, the French turned a blind eye to the assembly of Citroen in the Kaluga region.
Of course, everything comes from China and is formally not related to the European office. But who will believe that Paris does not have the opportunity to prohibit the Chinese from sculpting a double chevron on the Citroen radiator grille from Russia. As they say in such cases, everyone understands everything. For example, the Koreans, who launched an extremely murky scheme to assemble Solaris cars near St. Petersburg. This name hides Kia and Hyundai cars, once mega-popular in Russia.
Everything in history is confusing. It is not known, for example, where components will come from when the stocks in warehouses, gathering dust since 2022, run out. Has South Korea really returned to us and will arrange supplies? That seems to be the case. The Koreans and French could not ignore the 60% growth of the automobile market in 2023 and decided to grab their piece. Moreover, the margin on our murky market can be taken very good.
What is the state doing in such difficult conditions?
The movements are very contradictory.
On the one hand, the policy of protectionism allowed Avtovaz to blindly offer cars in the price range of 1–2,5 million rubles, which can only be called wild.
On the other hand, the government is trying in every possible way to pull off a trick from the 2000s and invite automakers to empty assembly plants. This will require labor, and the Chinese will be forced to localize production, otherwise there will be no benefits. Only China is still cool about this - the number of localized production facilities can be counted on one hand.
If everything works out, then we will once again repeat the story of the loss of the design school. Only now Avtovaz will be strangled not by the Renault-Nissan alliance, but by some Geely or Chery.
Who can say why the country needs such an electric car, the Atom, if we can barely even drive cars with internal combustion engines?
We are also interested in electric cars, which cost hundreds of millions of rubles. For example, they are actively working on the Atom platform, which is positioned as “an electric vehicle gadget with wide possibilities for personalization and digital interaction with the city.” A very timely car, to say the least.
In order to preserve the remnants of the auto industry, the government needs a large-scale program of production of new cars. Yes, this will be expensive and slow, but it is extremely necessary. A whole line of frankly outdated cars has no direct replacement. We are talking about the Niva, all the UAZs, the aging Vesta platform, and the Volga should be a Volga, and not a Changan, as it is now.
There is no point in repeating the trick of the 2000s with the localization of imported cars; it is much more promising to remember and reproduce the path of the Soviet automobile industry of the 60–80s, the fruits of which we still enjoy. It is quite possible to do this in 5–6 years, you just have to want it.
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