Will setbacks help: What awaits Russian car factories under US sanctions?
September 22, 2023
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Last week, Russian car factories – AVTOVAZ, Sollers and Moskvich – were blacklisted in the United States. So far, only Avtotor has escaped the ominous press of the
Last week, Russian car factories – AVTOVAZ, Sollers and Moskvich – were blacklisted in the United States. So far, only Avtotor has escaped the ominous press of the US Treasury Department, but that probably won’t last long. The AvtoVzglyad portal reflected on the consequences of the new sanctions on the health of an industry important for the country.
It has long been clear to everyone what kind of animal the American sanctions are. This is a blanket ban on cooperation that extends far beyond North America. Those who did not participate could be listed on one side. Even the former “union republics”, now members of the CSTO and the Customs Union, are very likely to radically reduce their participation in the technological chains leading to Russian territory. Well, there are no surprises here – it’s their own fault, allowing them to just sit on their necks, without any responsibility for the return.
In the same way, the inclusion in the sanctions list of purely peaceful production companies, such as AVTOVAZ, which, due to its specific characteristics, did not intend to create anything military, did not come as a bolt from the blue. But the objectives of the United States are clear to everyone, and there is no point in rehashing them.
Took a wrong turn
Since any kind of partnership with Western countries, as well as with Korea and Japan, fell into disarray a year and a half ago, no new complications should be expected from this side. The worst that can happen has already happened. Iran is and remains the most reliable supplier of cars, spare parts or technologies. Unfortunately, however, all of the above is not the second or even the third freshness.
And then, at the point of the split, something amazing happened. The leaders of the auto industry apparently have not learned, are not learning and do not want to learn. After quickly calculating all the possible options in their heads, calculating debits and credits and adding their aversion to creative activities, they enthusiastically surrendered to their Chinese ‘friends’. Given the complete lack of desire to urgently and on a large scale develop our own production and technological base, such development of events is considered exclusively as walking on a rake.
Critical dependence
We have largely disconnected ourselves from Western supplies, although the cars offered to Russian drivers have lost quality. But the further we go, the more we become critically dependent on Chinese companies, and there is no end in sight to this process. And the point is not so much that the market is flooded with cars from the Middle Kingdom, but rather the trend of replacing parts suppliers.
Instead of actively developing domestic production based on our own technological solutions, we are again trying to be cunning, deceive the time and ourselves. For example, ABS systems from the Russian company Itelma consist entirely of Chinese components, including software. Or another example: instead of our own CVTs, we will buy units from the Chinese company Zhejiang Wanliyang Transmission. Automatic transmissions and airbags are Chinese, not to mention smaller, but no less important car systems.
Us or the US?
You don’t need phenomenal visionary powers, or at least a keen sense of trouble, to assume that this path leads to an even deeper hole than the one from which we are currently trying with incredible effort to escape. Our Chinese friends will remain friends as long as they don’t suffer any consequences. But the United States is going to crush us systematically and with increasing zeal.
So the day is not far away when China will be faced with a choice: which relationship to sacrifice – with us or with the Americans. Given the Celestial Empire’s apparent unwillingness to quarrel with its overseas partner and lose its huge market, it is not difficult to guess the correct answer.
Plans for maximum localization of car and car parts production for all domestic manufacturers have so far only existed on paper. In practice, the search for ways to circumvent the sanctions regime continues. This is not surprising: creating your own technological base practically from scratch requires serious financing, which is beyond the power of individual companies – even such powerful companies as AVTOVAZ. But our ministerial workers are not thinking about targeted government funding and are not itching about it at all: there is a complacent peace in both the Ministry of Finance and the Ministry of Industry and Trade.
Photo: globallookpress.com
Photo: globallookpress.com
It has long been clear to everyone what kind of animal the American sanctions are. This is a blanket ban on cooperation that extends far beyond North America. Those who did not participate could be listed on one side. Even the former “union republics”, now members of the CSTO and the Customs Union, are very likely to radically reduce their participation in the technological chains leading to Russian territory. Well, there are no surprises here – it’s their own fault, allowing them to just sit on their necks, without any responsibility for the return.
In the same way, the inclusion in the sanctions list of purely peaceful production companies, such as AVTOVAZ, which, due to its specific characteristics, did not intend to create anything military, did not come as a bolt from the blue. But the objectives of the United States are clear to everyone, and there is no point in rehashing them.
Took a wrong turn
Since any kind of partnership with Western countries, as well as with Korea and Japan, fell into disarray a year and a half ago, no new complications should be expected from this side. The worst that can happen has already happened. Iran is and remains the most reliable supplier of cars, spare parts or technologies. Unfortunately, however, all of the above is not the second or even the third freshness.
And then, at the point of the split, something amazing happened. The leaders of the auto industry apparently have not learned, are not learning and do not want to learn. After quickly calculating all the possible options in their heads, calculating debits and credits and adding their aversion to creative activities, they enthusiastically surrendered to their Chinese ‘friends’. Given the complete lack of desire to urgently and on a large scale develop our own production and technological base, such development of events is considered exclusively as walking on a rake.
Critical dependence
We have largely disconnected ourselves from Western supplies, although the cars offered to Russian drivers have lost quality. But the further we go, the more we become critically dependent on Chinese companies, and there is no end in sight to this process. And the point is not so much that the market is flooded with cars from the Middle Kingdom, but rather the trend of replacing parts suppliers.
Instead of actively developing domestic production based on our own technological solutions, we are again trying to be cunning, deceive the time and ourselves. For example, ABS systems from the Russian company Itelma consist entirely of Chinese components, including software. Or another example: instead of our own CVTs, we will buy units from the Chinese company Zhejiang Wanliyang Transmission. Automatic transmissions and airbags are Chinese, not to mention smaller, but no less important car systems.
Us or the US?
You don’t need phenomenal visionary powers, or at least a keen sense of trouble, to assume that this path leads to an even deeper hole than the one from which we are currently trying with incredible effort to escape. Our Chinese friends will remain friends as long as they don’t suffer any consequences. But the United States is going to crush us systematically and with increasing zeal.
So the day is not far away when China will be faced with a choice: which relationship to sacrifice – with us or with the Americans. Given the Celestial Empire’s apparent unwillingness to quarrel with its overseas partner and lose its huge market, it is not difficult to guess the correct answer.
Plans for maximum localization of car and car parts production for all domestic manufacturers have so far only existed on paper. In practice, the search for ways to circumvent the sanctions regime continues. This is not surprising: creating your own technological base practically from scratch requires serious financing, which is beyond the power of individual companies – even such powerful companies as AVTOVAZ. But our ministerial workers are not thinking about targeted government funding and are not itching about it at all: there is a complacent peace in both the Ministry of Finance and the Ministry of Industry and Trade.
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.