The proposal to sell the factories left by foreign companies to the Chinese part was put forward by the Liberal Democratic Party’s Deputy Chairman of the State Duma, Boris Chernyshov, on 20 December.
“Many foreign automakers have left their production facilities in Russia.
In this context, it is recommended that some of the production be sold to Chinese brands so that they can organize the production of their cars on the basis of these enterprises.
– caused DEA News Description referring to Chernyshov’s direct speech.
Such a measure will allow Russians to buy cars produced in Russia and not overpay dealers and speculators for cars of European brands. The vice-chairman of the State Duma noted that this would be attractive to the Russians. A few hours after the broadcast, Chernyshov denied this information, saying that there was no such initiative in the parliamentary portfolio.
Can this idea come true?
Experts interviewed by socialbites.ca believe that the acquisition of production capacities of global automakers in Russia may concern only small Chinese auto companies. Sergey Burgazliev, an independent consultant in the automotive industry, believes that for major market players, the deployment of full-scale production in the country is currently unimportant due to the low sales volumes in China and the low production costs of cars.
“The major Chinese automakers are unlikely to do this of their own volition, the operating costs per unit of production in China are low, because there cars are produced in millions of copies,” Burgazliev says in an interview with socialbites.ca. —
If a small company like Haima wants to enter Europe, it can theoretically buy a factory there, provided that no sanctions are imposed on Chinese goods produced in Russia.”
According to the source of the publication, a much more viable idea for using idle capacities would be the creation of several state structures in Russia with different management, competing with each other and cooperating with different automakers ready to work in our country.
A similar program has been implemented in China and is working successfully: FAW, BAIC, SAIC concerns are to some extent state-owned and produce about 60% of cars in total.
“There are state-owned automakers, but this does not prevent them from competing with each other, thereby creating an affordable and quality product for consumers,” emphasizes the expert.
Sergei Udalov, managing director of the Avtostat analytical agency, admits that the current volumes of the Russian market do not allow us to count on the arrival of automakers ready for large investments in full-scale production.
“This year the sales volume will be around 620,000 vehicles, next year we will not see more than 700,000 vehicles.
With such a market size, it makes no sense to organize full-time production.
From a market point of view, although there is room for new producers, especially if they work for a long time, ”Udalov tells socialbites.ca.
According to him, the most acute shortage of new cars is felt in the segments of taxis, ridesharing, cars for corporate fleets. At the same time, Udalov notes that private buyers currently do not have the money to buy new cars at the set prices.
Import only
Anton Shaparin, Vice President of the National Automobile Association (NAU), believes that under the current circumstances it is more relevant for automakers from China to supply car kits for sale under local umbrella brands or to sell finished cars.
“It seems to me that such an offer could be of interest to second-tier Chinese manufacturers who have no plans to enter European markets. There are also concerns with longstanding relations with Russia.
For example, BAIC, a large state-owned company,
Shaparin tells socialbites.ca.
The US vice president argues that the geopolitical situation around Russia is changing rapidly and that Chinese companies often take a long time to make a decision. All agreements with former owners provide for the possibility of repurchase. In this regard, the question arises, what to do if these assets are transferred further?
“I am confident that there is no possibility of further sale in the documents of the sold assets, for example Renault and Nissan. I suspect the circumstances stipulate that they must remain on FSUE NAMI’s balance sheet,” says Shaparin.
The expert concludes that stimulating demand seems like a more appropriate measure in the current circumstances and Russia is now more interested in Chinese automakers than Russia.
After the start of the CBO in Russia, most foreign auto companies stopped production at their factories, including Volkswagen, Renault, Nissan, Hyundai, Toyota, Mercedes-Benz, Mazda, Stellantis. At the end of May, the sale of Renault assets to Russian state structures was announced: the share in AvtoVAZ was transferred to the NAMI scientific institute, and the Moscow plant to the Moscow government. In October, the same NAMI transferred the assets of Nissan.
Mazda sold the factory in Vladivostok to Sollers, the assets of Mercedes-Benz were transferred to the dealership holding Avtodom, and Volkswagen left the production site at GAZ in Nizhny Novgorod. The Kaluga plant remains the property of the German company. Toyota announced that automobile production was discontinued and St. announced the reduction of factory personnel in St. Petersburg.