Strategic Perspectives on Russia’s Auto Industry Localization and Investment Policy

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Sergei Kurdyuk, a noted automotive designer who previously held senior engineering roles at AvtoVAZ and UAZ, spoke recently about what the Russian auto industry could need if current conditions persist. He argues that Russia’s investment climate does not adequately support the growth of the automotive sector.

Without a coordinated localization strategy at the government or state level, and without new institutions that pursue sensible policies with appropriate funding, the industry risks increasingly turning to components sourced from Asia, including China, India, and Iran. This shift could gradually degrade the quality and reliability of locally manufactured equipment. Over time, domestically produced gear may be replaced by imported products, for example from China, or, in scenarios with limited external supply, by stable but lower-performing alternatives that struggle to compete with imports, according to the Volga News information portal quoting Kurdyuk.

In the early 2010s, Kurdyuk served as the chief designer at AVTOVAZ and later led the STC at UAZ. Today, he heads the digital development processes laboratory known as Laduga, where he focuses on the design of gearboxes for heavy equipment and the advancement of in-house software.

The former head of AVTOVAZ’s technical department advocates introducing mobilization-style measures into the national economy. He calls for clear priorities set at the state level, steady investment at a rate of 2–3 percent per year, and the creation of national projects that prioritize a group of components for localization with the participation of OEMs and suppliers. He notes that OEMs are firms that manufacture components for use by other brands, and that OEM manufacturing is well established in China.

If national projects are launched to identify and localize a prioritized set of components with the participation of OEMs and suppliers, and the government approves a list of import-substitution targets aligned with national goals, a joint path could emerge for Russian and Chinese companies to implement these plans. Kurdyuk believes this collaboration could help advance the localization effort and support domestic industry goals.

  • Meanwhile, KAMAZ has begun mass production of Compass medium-truck cabs, with initial deliveries previously sourced from China.
  • Further insights and perspectives can be found in regional outlets and social channels.
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