In assessing the state of the Russian economy, Vyacheslav Volodin, head of the State Duma, noted that about 75.9 percent of foreign companies still operate in Russia.
He said the move signals confidence in Russia’s economic prospects and satisfaction with the business climate. Those that exited are said to have lost billions, while domestic firms have stepped in to fill the gaps and boost production.
Volodin claimed that clothing output rose by 42 percent and medicine production increased by 15 percent. He emphasized that a nationally oriented business sector keeps earnings within the country to fund national development.
In August a spokesman for the lower chamber reported that roughly 77.6 percent of foreign firms that remained in Russia continued operations, with about 1,382 people employed across the country.
On January 8, Sergey Katyrin, president of the Chamber of Commerce and Industry, said only a quarter of Russian companies that lost Western partners could replace them. He also noted that sanctions harmed the work of more than 60 percent of domestic firms.
Katyrin urged expanding legal support for entrepreneurs and helping businesses find new partners in foreign trade. He highlighted a recent business mission to Iran that involved 100 representatives from various Russian companies.
How many companies left the market?
Following Russia’s military operation in Ukraine and the imposition of sanctions, many foreign firms began to withdraw. Major brands such as McDonald’s, Coca Cola, Apple, Siemens, H and M, Lego, IKEA, Mercedes, Ford, Toyota, Nokia, and Electrolux announced suspensions or withdrawals from Russia.
A Centre for Strategic Studies report titled The Picture of Foreign Business notes that a survey of 600 large foreign companies operating in Russia in 2022 found that 34 percent restricted activities, 15 percent left by transferring ownership, and 7 percent exited completely without a sale. The study covered firms with revenues around 5.7 billion rubles and data through September 2022, before mobilization developments.
The report identified oil and gas, banking, automotive and food as the most affected sectors, while microelectronics and IT services faced less disruption. Analysts observed that 61 percent of companies withdrawing produced simple goods and services, while 39 percent engaged in more complex manufacturing. Technology gaps, raw material shortages, and skill deficits were cited as key obstacles to rebuilding production in Russia.
Many organizations faced financial losses from restricted or halted activities. The CSR notes that the exit of large brands has had a measurable impact on GDP, surpassing the declines seen in several peer economies. Authorities responded by enabling parallel imports of goods from a list compiled by the Ministry of Industry and Trade, though about 25 percent of departing brands were not covered by this policy, meaning more than a hundred brands remained outside the program.
Russia reported that parallel imports exceeded 20 billion dollars in value by December, with vehicles, machine tools, equipment, industrial lines, and light consumer goods most affected by the shift.
Affected sectors
The withdrawal of foreign firms substantially affected the automotive sector. In 2022, about 45 foreign brands exited the Russian market, leaving 14 manufacturers in operation, of which three are domestic and 11 are Chinese. The publication Izvestia drew attention to the state of the market.
By the end of 2022, roughly 20 to 30 thousand new cars from foreign brands remained in the channels of Russian car dealers, concentrated mostly in premium Chinese models. The most pronounced shortages occurred in Korean, Japanese, French and German mid-range vehicles such as Kia, Hyundai, Toyota, Renault and Volkswagen.
Retail real estate also faced a downturn in 2022 as new shopping centers opened at a slower pace. Observers noted a decline in physical retail, with steps down in both food and non food segments. INFOLine highlighted significant drops in household appliances and electronics, with clothing and footwear also contracting. Meanwhile, domestic food producers captured a share of imports by shelving one of every seven foreign brands.