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After a bunch of European and Asian manufacturers simply “threw away” anything and everything from their Russian counterparts, import substitution has become a painfully forced trend for us.
For almost 20 years, the Russian automotive industry has developed as an integral part of the global automotive business. But the well-known events of 2022 put her in the position of a dog thrown into the cold by eccentric owners: survive, they say, then as you know … But we are all smart and immediately saw a way out of the situation: import substitution! We must learn to do everything we need ourselves, not depending on the whims of foreigners.
Much has been said on this subject by civil servants and experts over the past year. And now Vladimir Putin also participated in the rescue of the Russian auto industry: he instructed Prime Minister Mikhail Mishustin “to promote the development and application of requirements for the localization of production of cars used in the provision of passenger taxi services and car sharing consider services.” And report before August 1 – that he will be able to “consider”.
The idea is clear: it is necessary to stimulate the production of as many Russian-made cars in our country as possible. For example, by artificially increasing the demand for it from corporate buyers – taxi and car sharing companies. According to various estimates, the taxi industry in Russia numbers about 440,000 cars. There are about 50,000 shared cars, about half a million in total. Forcing them all to transfer home at once is a tempting idea: our auto industry will rejoice!
But in this wonderful story there are several moments that make it quite utopian – let’s call it that. Let’s start with the fact that it is only possible to demand a certain level of localization of a certain category of machines in a country if it is physically possible to provide it. At the moment AVTOVAZ products have a more or less decent degree of localization – something like 70% on average for the model range. Well, and Haval too – thanks to the presence of its own assembly plant in Russia. These “Chinese” are slowly approaching the 50% localization level.
All our other companies that produce cars suitable for taxis and car sharing are currently in the process of actual assembly of car kits coming from China. That is, in their relationship, the concept of “localization” applies only as a form of hope for a fairly distant future. What we have now is very vague for geopolitical reasons. The production capacities of AVTOVAZ and Haval may cover the need for local taxis and “karsh mobiles”. Moreover, no more than 100,000 cars are needed annually to renew their fleet.
An interesting nuance: as practice has shown, customers-passengers of taxis and “karsha” are not at all in favor of the products of the Togliatti automobile plant. Give them foreign cars! They don’t want to drive one of the original ones! And what to do, you ask?
Blaming everything on the only suitable brand – Chinese? Artificially making the exclusive supplier of vehicles for the entire transport sector?! It won’t hurt, it will be greasy, right?!
In addition, the Ministry of Industry and Commerce is going to permanently change the criteria for the localization of cars. Until now, the emphasis in this sense has been roughly on the manufacture of car bodies on Russian territory – its stamping, welding, painting. And in the near future, the localization rate will be calculated mainly based on the degree of “Russian” of the engine, transmission, chassis components and electronics. After that, the Haval models will certainly show an obvious low content of domestic components.
Building a national auto parts industry (partly from scratch) is a matter of decades and trillions of dollars of investment. Import substitution won’t work anytime soon. If only because of the lack of competence in the organization of many highly specialized industries. The manufacture of a small (but much needed!) piece of iron, which is used by the same AvtoVAZ in one of its models, is unlikely to be profitable. Now if “pieces of iron” with a similar purpose went to the conveyor belts of half of the world’s car factories and brought production volumes, then the company would be profitable. In fact, the entire global auto parts industry operates on this principle.
And now Russia is actually faced with the task of building our sovereign “clone”, a kind of parochial analogue of the global conglomerate. And now the authorities are trying to solve it, including by increasing the level of localization of taxis and car sharing?! Oh yeah…
Most likely, the idea of ​​​​forced localization comes down to something like gluing domestic nameplates on components that come from the same China – electronics, assemblies, assemblies, and so on. This “technology” in Russia has already been mastered to perfection.
But who cares if localization degenerates into a disguise of “Chinese”? The president ordered complete localization in a single transport sector within a few months! So you have to follow orders. How can we. It is not without reason that Russia is called the ‘homeland of elephants’. The head of state will meet these creatures in August.
For almost 20 years, the Russian automotive industry has developed as an integral part of the global automotive business. But the well-known events of 2022 put her in the position of a dog thrown into the cold by eccentric owners: survive, they say, then as you know … But we are all smart and immediately saw a way out of the situation: import substitution! We must learn to do everything we need ourselves, not depending on the whims of foreigners.
Much has been said on this subject by civil servants and experts over the past year. And now Vladimir Putin also participated in the rescue of the Russian auto industry: he instructed Prime Minister Mikhail Mishustin “to promote the development and application of requirements for the localization of production of cars used in the provision of passenger taxi services and car sharing consider services.” And report before August 1 – that he will be able to “consider”.
The idea is clear: it is necessary to stimulate the production of as many Russian-made cars in our country as possible. For example, by artificially increasing the demand for it from corporate buyers – taxi and car sharing companies. According to various estimates, the taxi industry in Russia numbers about 440,000 cars. There are about 50,000 shared cars, about half a million in total. Forcing them all to transfer home at once is a tempting idea: our auto industry will rejoice!
But in this wonderful story there are several moments that make it quite utopian – let’s call it that. Let’s start with the fact that it is only possible to demand a certain level of localization of a certain category of machines in a country if it is physically possible to provide it. At the moment AVTOVAZ products have a more or less decent degree of localization – something like 70% on average for the model range. Well, and Haval too – thanks to the presence of its own assembly plant in Russia. These “Chinese” are slowly approaching the 50% localization level.
All our other companies that produce cars suitable for taxis and car sharing are currently in the process of actual assembly of car kits coming from China. That is, in their relationship, the concept of “localization” applies only as a form of hope for a rather distant future. What we have now is very vague for geopolitical reasons. The production capacities of AVTOVAZ and Haval may cover the need for local taxis and “karsh mobiles”. Moreover, no more than 100,000 cars are needed annually to renew their fleet.
An interesting nuance: as practice has shown, customers-passengers of taxis and “karsha” are not at all in favor of the products of the Togliatti automobile plant. Give them foreign cars! They don’t want to drive one of the original ones! And what to do, you ask?
Blaming everything on the only suitable brand – Chinese? Artificially making the exclusive supplier of vehicles for the entire transport sector?! It won’t hurt, it will be greasy, right?!
In addition, the Ministry of Industry and Commerce is going to permanently change the criteria for the localization of cars. Until now, the emphasis in this sense has been roughly on the manufacture of car bodies on Russian territory – its stamping, welding, painting. And in the near future, the localization rate will be calculated mainly based on the degree of “Russian” of the engine, transmission, chassis components and electronics. After that, the Haval models will certainly show an obvious low content of household components.
Building a national auto parts industry (partly from scratch) is a matter of decades and trillions of dollars of investment. Import substitution won’t work anytime soon. If only because of the lack of competence in the organization of many highly specialized industries. The manufacture of a small (but much needed!) piece of iron, which is used by the same AvtoVAZ in one of its models, is unlikely to be profitable. Now if “pieces of iron” with a similar purpose went to the conveyor belts of half of the world’s car factories and brought production volumes, then the company would be profitable. In fact, the entire global auto parts industry operates on this principle.
And now Russia is actually faced with the task of building our sovereign “clone”, a kind of parochial analogue of the global conglomerate. And now the authorities are trying to solve it, including by increasing the level of localization of taxis and car sharing?! Oh yeah…
Most likely, the idea of ​​​​forced localization comes down to something like gluing domestic nameplates on components that come from the same China – electronics, assemblies, assemblies, and so on. This “technology” in Russia has already been mastered to perfection.
But who cares if localization degenerates into a disguise of “Chinese”? The president ordered complete localization in a single transport sector within a few months! So you have to follow orders. How can we. It is not for nothing that Russia is called the “homeland of elephants”. In August, the head of state gets acquainted with these creatures.
Source: Avto Vzglyad
Donald Salinas is an experienced automobile journalist and writer for Div Bracket. He brings his readers the latest news and developments from the world of automobiles, offering a unique and knowledgeable perspective on the latest trends and innovations in the automotive industry.
