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Will Russia’s friendship with Turkey and Iran make up for the loss of global automakers?

  • October 3, 2022
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After the beginning of the “partial mobilization”, representatives of the companies “Toyota” and “Mazda” announced their intention to stop working on the territory of Russia. In turn, Russian

Will Russia’s friendship with Turkey and Iran make up for the loss of global automakers?
After the beginning of the “partial mobilization”, representatives of the companies “Toyota” and “Mazda” announced their intention to stop working on the territory of Russia. In turn, Russian regulators are trying to increase import substitution and develop relations with Turkish and Iranian partners. Will ‘collective Asia’ be able to replace global car companies, the AvtoVzglyad portal found.

After fifteen years of stable operation, the Toyota car plant in Shushary ceased operations. This was announced by company representatives on September 23. According to the official version, the corresponding decision was made in view of logistical problems and the lack of industrial components. Recall that Toyota production in St. Petersburg was stopped on March 4. Since then, the brand hopes to restore regularity and volume of deliveries. But after 6 months a fundamental decision came.

— We have closely monitored the situation and assessed the sustainability of our business in Russia. However, after six months, we have not been able to develop an approach that would allow us to be fully active again, and we do not see the possibility of resuming production in the near future. The decision to stop production in Russia was not an easy one, Autonews quotes Toyota employees as saying.

Led by the infamous breach of logistics, Mazda’s Russian office also announced its intention to exit the local market on September 28. The scenario is still the same: a shortage of inventories and the absence of important car parts, causing production to slow down completely.

For example, the Russian car industry is once again losing important players. And since the start of the special operation in Ukraine, Audi, BMW, Ferrari, Ford, Honda, Infiniti, Jaguar Land Rover, Lamborghini, Renault, Mercedes, Nissan, Porsche, Rolls-Royce, Skoda, Stellantis, VW, Volvo have stopped deliveries of cars to our market. Half of these brands left our country completely before the Japanese, some still retain Russian offices, but almost completely stopped investing in ongoing projects.

In the context of the total flight of former partners, Russian regulators are not only forced to look for new ones, but also to look differently at the strategic prospects of the auto industry. At the same time, if a new view of the industrial sector in the country, to say the least, turned out to be short-sighted (we are talking about the “Strategy for the Development of the Automobile Industry of the Russian Federation until 2035”), with a rich nomenclature of error and conspiracy, the agenda of international partnerships proved more persistent.

For example, friendly Iran, represented by Mohammadreza Najafi-Manesh, chairman of the board of the Spare Parts Production Association, announced its full readiness for the joint production of cars. Or at least a mutually beneficial exchange of Renault components (the French were present in both countries and left both).

– It would be very good to create a joint venture with the participation of Russian and Iranian investors, banks, including the creation of enterprises for the production of parts for the markets of the two countries. It is possible,” said Najafi-Manesh.

Iran is an ideal counterpart to Russia, not only because of Western boycotts and a record number of economic restrictions. This is by no means a “bad luck” political partnership. Tehran has long been developing in the face of international sanctions and is also actively cooperating with Russia on a number of key technology issues. In the case of strategic agreements, we will talk about expanding the car offer, localization of Iranian production and about a new competitive market coupling. Turkey, in turn, is Russia’s main hub in the implementation of parallel import programs and, more recently, a major partner in the automotive industry.

Up to half a million people are involved in Turkish mechanical engineering – this is a backbone of the “half-month” economy. Ankara is a renowned global car manufacturer: Toyota, FIAT, Hyundai, Renault, Ford, Honda and Isuzu are assembled in Turkey. The industrial companies are equipped with the most modern machines. So there is clearly something to share with Russia.

And this despite the long-standing dependence of the Russian Federation on Turkish auto parts, as the export volume of spare parts supplied exceeds $12 billion per year. Indeed, what has hindered the “full cycle” cooperation all along?

“Collective Asia” has always been at hand. It’s not clear why the planned auto industry collaboration required sanctions isolation. In Russia, however, Asian developments have been clearly disdainful for the time being, with the western production course being the most important. Today’s strategic turns – if not 360, then 180 degrees – don’t look independent.

Although the same Turkey, given its auto-industrial development, could have long played the role of a “translator” of Western technologies, their adaptation to the domestic market. And working closely with Iran, it would be possible to test the viability of global brands and localized industries in countries with resource-based economies, draw appropriate conclusions and establish strategic guidelines.

  • photo of the manufacturer.
  • photo of the manufacturer.
  • Photo by TASS.
  • Photo by globallookpress.com

After fifteen years of stable operation, the Toyota car plant in Shushary ceased operations. This was announced by company representatives on September 23. According to the official version, the corresponding decision was made in view of logistical problems and the lack of industrial components. Recall that Toyota production in St. Petersburg was stopped on March 4. Since then, the brand hopes to restore regularity and volume of deliveries. But after 6 months a fundamental decision came.

— We have closely monitored the situation and assessed the sustainability of our business in Russia. However, after six months, we have not been able to develop an approach that would allow us to be fully active again, and we do not see the possibility of resuming production in the near future. The decision to stop production in Russia was not an easy one, Autonews quotes Toyota employees as saying.

Led by the infamous breach of logistics, Mazda’s Russian office also announced its intention to exit the local market on September 28. The scenario is still the same: a shortage of inventories and the absence of important car parts, causing production to slow down completely.

For example, the Russian car industry is once again losing important players. And since the start of the special operation in Ukraine, Audi, BMW, Ferrari, Ford, Honda, Infiniti, Jaguar Land Rover, Lamborghini, Renault, Mercedes, Nissan, Porsche, Rolls-Royce, Skoda, Stellantis, VW, Volvo have stopped deliveries of cars to our market. Half of these brands left our country completely before the Japanese, some still retain Russian offices, but almost completely stopped investing in ongoing projects.

In the context of the total flight of former partners, Russian regulators are not only forced to look for new ones, but also to look differently at the strategic prospects of the auto industry. At the same time, if a new view of the industrial sector in the country, to say the least, turned out to be short-sighted (we are talking about the “Strategy for the Development of the Automobile Industry of the Russian Federation until 2035”), with a rich nomenclature of error and conspiracy, the agenda of international partnerships proved more persistent.

For example, friendly Iran, represented by Mohammadreza Najafi-Manesh, chairman of the board of the Spare Parts Production Association, announced its full readiness for the joint production of cars. Or at least a mutually beneficial exchange of Renault components (the French were present in both countries and left both).

– It would be very good to create a joint venture with the participation of Russian and Iranian investors, banks, including the creation of enterprises for the production of parts for the markets of the two countries. It is possible,” said Najafi-Manesh.

Iran is an ideal counterpart to Russia, not only because of Western boycotts and a record number of economic restrictions. This is by no means a “bad luck” political partnership. Tehran has long been developing in the face of international sanctions and is also actively cooperating with Russia on a number of key technology issues. In the case of strategic agreements, we will talk about expanding the car offer, localization of Iranian production and about a new competitive market coupling. Turkey, in turn, is Russia’s main hub in the implementation of parallel import programs and, more recently, a major partner in the automotive industry.

Up to half a million people are involved in Turkish mechanical engineering – this is a backbone of the “half-month” economy. Ankara is a renowned global car manufacturer: Toyota, FIAT, Hyundai, Renault, Ford, Honda and Isuzu are assembled in Turkey. The industrial companies are equipped with the most modern machines. So there is clearly something to share with Russia.

And this despite the long-standing dependence of the Russian Federation on Turkish auto parts, as the export volume of spare parts supplied exceeds $12 billion per year. Indeed, what has hindered the “full cycle” cooperation all along?

“Collective Asia” has always been at hand. It’s not clear why the planned auto industry collaboration required sanctions isolation. In Russia, however, Asian developments have been clearly disdainful for the time being, with the western production course being the most important. Today’s strategic turns – if not 360, then 180 degrees – don’t look independent.

Although the same Turkey, given its auto-industrial development, could have long played the role of a “translator” of Western technologies, their adaptation to the domestic market. And working closely with Iran, it would be possible to test the viability of global brands and localized industries in countries with resource-based economies, draw appropriate conclusions and establish strategic guidelines.

Source: Avto Vzglyad

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