Nikolai Andreevich asks whether the present crisis in the auto sector is solely about sanctions. The answer is no. The roots stretch back long before any political measures took effect. In Soviet times the core problem was clear: cars were not accessible to the average person. Cars were a luxury, and even as a minister understood this, the late 1980s saw the economy falter with unresolved sectoral issues only delaying the inevitable. The consequence arrived when a flood of used foreign cars entered the market. People bought them because supply was abundant and prices were reasonable. Critics later claimed this influx turned the country into a graveyard of worn out vehicles, yet stopping it was impossible. Global automakers then set up assembly plants in Russia, from the Far East through Kaluga and near St. Petersburg. Availability of cars improved quickly and the notion of driving a car ceased to be a luxury, yet this success carried a cost. Domestic supplier industries began to shrink as foreign components entered the market, eroding the local industrial base.
Was the decline in local suppliers a result of stiff competition from foreign manufacturers who brought their suppliers into Russia? In the Soviet era competition was almost nonexistent. Suppliers feared that their efforts would be taken away and the automaker had little choice but to work with what was available. This created quality problems, with many consumer complaints focusing on components. Today the situation is different. If a supplier does not satisfy, another can be found abroad. Yet the dependence on Western nations and critical parts now constrains the industry more than ever. The sanctions have sharpened this vulnerability and brought the automotive sector to a critical point.
The logical question is what should come next. The easiest move would be to shift procurement to friendly countries such as China. But that alone does not resolve the core issue. The risk remains that the same pattern could reemerge in the future. The path to technological independence lies in rebuilding a robust domestic component industry. This means both developing in-house capabilities and collaborating with partners from trusted nations while localizing production on Russian soil and securing intellectual property rights. Only then can the industry maintain sovereignty even with external partners. The journey will be long, costly, and demanding, but it is essential for real change. There is no time to waste, and industry support for localization projects must begin now.
If no action is taken and the Western supplier is simply replaced by an Eastern one, a decade or two from now the same problem will recur. Europe will accumulate wealth while Russia serves markets in China and elsewhere. The aim is to achieve technological independence without repeating past mistakes and without recreating the conditions that once destroyed the basis of local production.
The thinking has shifted. Automakers now expect higher quality and better results from their processes. Modern production leverages robotics, reducing manual labor. This shift in technology has a direct impact on quality. Some critics worry that there will be insufficient market volume to justify new plants, making local production less profitable than imports. The strategy should be flexible. It is not about self-sufficiency in every component. It is about determining which parts should be produced domestically, which are better produced with foreign cooperation, and which should be purchased. The main components must be manufactured in-house where feasible.
A concrete example is the lack of light diesel engines in Russia. The engine remains a critical component that is not easy to replace. Yet a few years ago the localization project for such an engine began and the new GAZ foundry started mass producing components for power units, including a small domestic diesel engine. This engine is now in demand not only at the Gorky Automobile Plant but also at other domestic plants. The foundry products are useful across other industries such as railway engineering and the oil and gas sector.
There are additional opportunities in auto chemicals and microelectronics. These are distinct markets where specialized professionals should lead efforts. The automaker should not attempt to invent in every domain but rather source what it needs and coordinate with partners. The question of who should spark import substitution is broad. It requires a state strategy that everyone contributes to. Automakers need to decide in the near term which platforms to adopt and which components should be developed with those platforms in mind. The state should act as a coordinator, aligning needs and clarifying where production will be organized and how. The centers for creating critical components should be the automakers themselves, provided they share a clear objective. Among the strongest players in this area is GAZ, which has shown resilience under sanctions for more than a year. Since 2018 it has shifted away from Western suppliers to partners from friendly countries and localized many components. It has offered alternatives across component groups and maintained a full product range for buyers throughout the years.
The GAZ plant is widely recognized for endurance in turbulent times. This resilience stems from the attention given to staff and the drive within the team for development and results. GAZ has a robust team of engineers capable of delivering both cars and parts, with ongoing innovations. For example, the engine project continues to progress. Recently, GAZ Group President Vadim Sorokin presented a concept for a new light commercial vehicle built entirely from Russian components, created by their own experts.
In the field of import substitution, GAZ should lead but not stand alone. Intra-industry cooperation and state support, including financial backing, are essential. The industry program requires far more resources than the current 30 billion rubles; analysts estimate 300 billion rubles over 3 to 4 years. Now is the moment to unite and act decisively. The belief that a breakthrough is impossible fades when there is collective resolve. This is a cause worth dedicating effort to for the long term. A pragmatic path forward is to stabilize local platforms, accelerate domestic production, and ensure a sustainable pipeline of components that can coexist with external partnerships. The ultimate goal is a self-sufficient, technologically advanced automotive sector for the country, built on a foundation of innovation and resilience, not on short-term expedients. This is the vision that motivates ongoing commitment to the road ahead.