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Why the Chinese auto industry is in no hurry to bow to our bureaucrats

  • July 21, 2023
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It seems that the Chinese are quite actively entering the Russian market – at least, it is widely believed. However, their “expansion” is not only tentative, but somehow

Why the Chinese auto industry is in no hurry to bow to our bureaucrats
It seems that the Chinese are quite actively entering the Russian market – at least, it is widely believed. However, their “expansion” is not only tentative, but somehow unclear, even illogical at first glance. Portal “AutoVzglyad” viewed the issue with an open mind.

It would seem that the vastness of the Russian market, cleared of hostile brands, should first of all attract powerful players, not limited in funds, who can seriously invest money in the development of a new direction of their business. Somehow it was taken for granted that the leaders in the production of cars in China themselves would strive to achieve long-term benefits in Russia as well, set up factories in our country to optimize costs and receive significant benefits from the state.

Leaders in the tail

But now that “one year has passed, another is coming”, and there are no snappy moves in this direction. For example, where is China’s largest manufacturer, BYD? Goblin knows where. At least, the Avtostat bureau does not observe it in the domestic TOP-25 after half a year’s results.

Changan, Geely and Chery, after BYD in the top five of the Celestial Empire in terms of car production, perform slightly more solidly. Chery is second to the inescapable LADA, Geely is fourth, Changan is fifth. However, they all limit themselves to exporting their products to Russia, without any thought of taking root in our soil. But no – Chery from time to time imitates the desire to arouse such a thing here. It was rumored that she tried to play tricks on the Kaliningrad Avtotor, but this is not true. Then to the factory, which Volkswagen once lovingly built, they knocked out wedges – but even there everything broke down, and it was clearly not the fault of the cheerful Kaluga “abandoned woman”.

Lively “little things”

But who is really integrated into the domestic economy? Firstly, Haval is the only Chinese brand with its own factory in the Tula region of the Russian Federation. BAIC and Kaiyi joined Avtotor. SWM also seems to be striving to join this tandem.

Under the guise of a primitive Russian Moskvich, JAC cars are produced in the capital of our motherland. The same brand signed an agreement with Sollers and produces commercial vehicles in Yelabuga and pick-ups in the Far East. In the Lipetsk region, the Motorinvest plant is successfully making Evolute electric vehicles, which are essentially a simple copy-paste of Dongfeng. All listed companies are not even in the top twenty in terms of production in China, and still outside the top ten in Russia.

Now let’s talk about projects that are likely to be implemented very soon. AVTOVAZ has chosen JAC as a strategic partner for power unit production – this is the first time. The Izhevsk plant seems to have made friends with Dongfeng and can begin assembling their cars – two. The crossover LADA X-Cross 5 presented at the St. Petersburg International Economic Forum is nothing more than a pre-styling FAW Bestune T77 with re-glued nameplates. It is planned to be assembled at the LADA plant in St. Petersburg, which used to be owned by Nissan. All the same faces except for Bestune, which also dabbles in the top 10 sales in China.

Boom postponed for now

Here’s such a strange sitivation, as Sam Weller said. The monsters of China’s auto industry smoke modestly on the sidelines and cheeky little things from the Middle Kingdom are slowly being introduced to the domestic industrial environment. Yes, all this is nothing more than a screwdriver assembly, but the leaders do not show any gestures in terms of localization at all. Although, if you look, there is nothing strange going on here. Big companies are not at all attracted by a close acquaintance with the Russian bureaucracy, which can nip any fine venture in the bud. As for the organization of new industries in Russia, I allow myself to quote again the economist Mikhail Khazin, who is familiar with the work of government officials firsthand:

– We have to make an effort, we have to allocate money from the budget, we have to check that they are used correctly – because if they are looted, nothing happens – so that a factory is built, so that it starts to produce something. If you look at the number of officials involved in this procedure – there are hundreds of them from a dozen ministries … And here with a single license from importers – well, let’s assume – 15% of annual sales. Can you imagine the scale? That’s why no one wants to produce, everyone wants to import… If we talk about building a factory that takes 8 years to build, who pays bribes, when do they pay bribes, how do they pay bribes? ..

“Krupnyak” to get involved in a fight means to enter the country seriously and for a long time. A trifle is like a fish: it almost did not suit her, she wag her tail – and damn it. Therefore, there will be no boom in the auto industry as long as it is ruled by “effective managers” – and in fact they now occupy key positions in it.

Photo by globallookpress.com
Photo by globallookpress.com

It would seem that the vastness of the Russian market, cleared of hostile brands, should first of all attract powerful players, not limited in funds, who can seriously invest money in the development of a new direction of their business. Somehow it was taken for granted that the leaders in the production of cars in China themselves would strive to achieve long-term benefits in Russia as well, set up factories in our country to optimize costs and receive significant benefits from the state.

Leaders in the tail

But now that “one year has passed, another is coming”, and there are no snappy moves in this direction. For example, where is China’s largest manufacturer, BYD? Goblin knows where. At least, the Avtostat bureau does not observe it in the domestic TOP-25 after half a year’s results.

Changan, Geely and Chery, after BYD in the top five of the Celestial Empire in terms of car production, perform slightly more solidly. Chery is second to the inescapable LADA, Geely is fourth, Changan is fifth. However, they all limit themselves to exporting their products to Russia, without any thought of taking root in our soil. But no – Chery from time to time imitates the desire to arouse such a thing here. It was rumored that she tried to play tricks on the Kaliningrad Avtotor, but this is not true. Then to the factory, which Volkswagen once lovingly built, they knocked out wedges – but even there everything broke down, and it was clearly not the fault of the cheerful Kaluga “abandoned woman”.

Lively “little things”

But who is really integrated into the domestic economy? Firstly, Haval is the only Chinese brand with its own factory in the Tula region of the Russian Federation. BAIC and Kaiyi joined Avtotor. SWM also seems to be striving to join this tandem.

Under the guise of a primitive Russian Moskvich, JAC cars are produced in the capital of our motherland. The same brand signed an agreement with Sollers and produces commercial vehicles in Yelabuga and pick-ups in the Far East. In the Lipetsk region, the Motorinvest plant is successfully making Evolute electric vehicles, which are essentially a simple copy-paste of Dongfeng. All listed companies are not even in the top twenty in terms of production in China, and still outside the top ten in Russia.

Now let’s talk about projects that are likely to be implemented very soon. AVTOVAZ has chosen JAC as a strategic partner for power unit production – this is the first time. The Izhevsk plant seems to have made friends with Dongfeng and can begin assembling their cars – two. The crossover LADA X-Cross 5 presented at the St. Petersburg International Economic Forum is nothing more than a pre-styling FAW Bestune T77 with re-glued nameplates. It is planned to be assembled at the LADA plant in St. Petersburg, which used to be owned by Nissan. All the same faces except for Bestune, which also dabbles in the top 10 sales in China.

Boom postponed for now

Here’s such a strange sitivation, as Sam Weller said. The monsters of China’s auto industry smoke modestly on the sidelines and cheeky little things from the Middle Kingdom are slowly being introduced to the domestic industrial environment. Yes, all this is nothing more than a screwdriver assembly, but the leaders do not show any gestures in terms of localization at all. Although, if you look, there is nothing strange going on here. Big companies are not at all attracted by a close acquaintance with the Russian bureaucracy, which can nip any fine venture in the bud. As for the organization of new industries in Russia, I allow myself to quote again the economist Mikhail Khazin, who is familiar with the work of government officials firsthand:

– We have to make an effort, we have to allocate money from the budget, we have to check that they are used correctly – because if they are looted, nothing happens – so that a factory is built, so that it starts to produce something. If you look at the number of officials involved in this procedure – there are hundreds of them from a dozen ministries … And here with a single license from importers – well, let’s assume – 15% of annual sales. Can you imagine the scale? That’s why no one wants to produce, everyone wants to import… If we talk about building a factory that takes 8 years to build, who pays bribes, when do they pay bribes, how do they pay bribes? ..

“Krupnyak” to get involved in a fight means to enter the country seriously and for a long time. A trifle is like a fish: it almost didn’t suit her, she wag her tail – and damn it. Therefore, there will be no boom in the auto industry as long as it is ruled by “effective managers” – and in fact they now occupy key positions in it.

Source: Avto Vzglyad

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