"Victory", "Volga" and "Moskvich" can be revived on German and Chinese technologies
One of the most annoying economic sanctions, the consequences of which the Russians really felt, was the withdrawal from the domestic market of the main Western automakers. The proposed model range in car dealerships has drastically reduced, prices for used foreign cars and components have jumped up significantly. However, a holy place, as you know, is never empty.
The empty niche was quickly filled by alternative suppliers, which in itself is pleasing, but there are serious questions about the ongoing “import substitution” that require adequate answers.
China
Of course, the eyes of the Russian officials in charge of the empty factories formerly owned by Western manufacturers and their orphaned workforce immediately turned to China. Indeed, in the Middle Kingdom over the past few decades, many new automotive industries have appeared, the quality of products of which has increased markedly compared to what it was 10 years ago. Chinese cars, as a rule, are created on the platforms of famous German, French, Japanese and South Korean brands taken off the assembly line, they use quite modern Technology, have an attractive interior and exterior design. Today, these are not at all the “buckets of nails” that were just a couple of decades ago.
Most of all in the current situation, the Great Wall company was lucky, which came to Russia in 2005, and in 2006 began assembling its Hover SUVs at the Avtotor plant in the Kaliningrad region. In 2014, she registered the Haval sub-brand, which was the first to be presented in our country. In 2019, the Chinese automaker opened a plant in Tula and now feels better than other foreign competitors on the Russian market. It seems that everyone has noticed how the number of SUVs and crossovers under the Haval brand has increased on our roads.
The Chinese state-owned holding company BAIC Group, the second largest manufacturer of commercial vehicles in China, has also recently entered the Russian market. Avtotor Kaliningrad organized a screwdriver assembly of a compact five-seater X35 crossover and a U5 plus sedan. The degree of localization of production is still minimal. About plans for further expansion, BAIC International CEO Patrick Young says the following:
This year we plan to launch 7 BAIC models on the Russian market, including one sedan, three urban crossovers, two SUVs and one electric car. In the future, due to the strong R&D capability of BAIC, more BAIC models will be planned and launched in the Russian market with advanced technology and more specialized equipment.
AvtoVAZ and Moskvich took a somewhat different path of cooperation with Chinese manufacturers within the framework of "badge engineering". At the former Nissan plant near St. Petersburg, which is now owned by AvtoVAZ, cars from the Chinese state company FAW will be assembled under the Russian brand. The head of the Russian company, Maxim Sokolov, commented on the decision as follows:
It will be produced under the Lada brand in those segments and classes of cars that will not “cannibalize” and also compete with the products that the Volga Automobile Plant is currently producing. Although we are negotiating with many automotive manufacturers in the South Asian region, we have made the most progress with a Chinese manufacturer.
The first on the conveyor, apparently, will be the converted crossover FAW Bestune T77. Similarly, under the revived Moskvich brand, the Chinese JAC JS4 crossover in petrol and electric versions will be assembled at the former Renault plant in Moscow. The degree of localization is currently minimal, the assembly is of a “screwdriver” nature.
An attempt to replace the departed American, German, Japanese, French and South Korean cars with Chinese ones is quite natural. However, from the point of view of the consumer, there are questions about the cost: many quite rightly complain that the “horse price tag”, 2-3 million rubles for a “Chinese” is too much. From the point of view of the national security of the Russian Federation, falling into technological dependence on the PRC is like going out of the fire into the frying pan. The government of the Russian Federation, represented by its relevant departments, should demand that Chinese automakers bring localization to 100%, otherwise, if the supply chain of components is blocked or Beijing makes a political decision to stop cooperation with Moscow, our country will again be left with a nose.
Germany?
The most interesting economic news recent days - this is a message that the German concern "Volkswagen" is allegedly ready to participate in the revival of the Soviet brands "Victory" and "Volga". The fact that a member of the Supervisory Board of Porsche, the former head of the board of directors of the GAZ Group, the Austrian businessman Siegfried Wolf wrote a letter with a proposal to President Putin, was told by Der Spiegel.
The attitude to this information in our country turned out to be very contradictory. Some of the domestic experts, analysts and other predictors considered that this was purely a fake, aimed at discrediting the Austrian businessman by his ill-wishers. We will answer that Volkswagen has not officially confirmed the authenticity of the message. On the other hand, there is nothing unrealistic in a possible attempt by the German automaker to remain on the Russian market, but under a different brand.
On the contrary, the Germans are clearly very sorry to lose the huge investments made earlier, as well as to give their share to the Chinese. Moreover, for a hasty departure for purely political reasons, Volkswagen got into lawsuits from a former partner in the GAZ group, which led to the arrest of his property. If, however, “badge engineering” is carried out and under the brand name “Pobeda” and “Volga” we begin to produce converted models of “Volkswagen” and “Skoda”, then the German concern will be able to retain a share of 270 thousand cars a year.
Is it good for us?
Rather yes than no. Firstly, the quality of the converted Volkswagen products should be noticeably higher than that of the Chinese comrades. Secondly, the Germans will have to decide something with the localization of the production of components in our country. Previously, they were in no hurry with this, because it was profitable for them to transport finished components to the Russian conveyor, but now, due to the sanctions regime, this is impossible. If the government of the Russian Federation puts pressure, then the Germans will have to organize full-cycle production in our country, which will subsequently reduce geopolitical risks. You can’t fall into complete dependence on China and put your eggs in one basket.
Information