Will Russia’s industrial sector, especially its automotive industry, endure the impact of sanctions? An independent expert, Sergey Burgazliev, addressed this question in the FinAuto-2022 forum, suggesting that the wave of restrictions could grow to more than seven thousand measures in the near term. He compared this looming breadth to Iran, a country under sanctions for over four decades, where the total count of restrictive actions reaches around 3,616.
Burgazliev noted that Russia has been cut off from US and European financial systems, a development that compounds logistical challenges. He warned that the repercussions of these sanctions, which weigh heavily on the economy, could persist for years, with the most pronounced damage hitting the financial, technology, and logistics sectors.
In terms of exports, restrictions reach electronics and semiconductors produced in Asia, but Burgazliev pointed out that dependence on American equipment and know-how means the so‑called Asian scenario is not a cure-all for Russia’s export potential.
Russian car manufacturers, including Kamaz and Ural, moved early to advocate simplified engineering regulations to keep production going with fewer imported components.
At the same time, Burgazliev recalled that domestic localization programs for vehicles have failed to meet their goals, despite the presence of institutions labeled as promoting advanced development. Russia continues to rely on imported parts due to shortages or quality concerns.
However, there are strategies that could steer the situation more positively. Drawing a parallel with Iran, Burgazliev cited two avenues: first, the creation of transit companies and barter arrangements, leveraging Russia’s natural resources as a form of exchange; second, the possibility of establishing an electronic currency with trading partners.
- In the near term, the Ministry of Industry and Trade is preparing a new technical regulation that would permit the production of simplified car models, with AvtoVAZ already signaling timelines for their introduction.
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