Why are all government efforts to develop the domestic auto industry failing?

January 6 2026 7 863 42

The Russian auto industry is in crisis, masked by prohibitive tariffs and budgetary injections. This was reported on January 6 by the Telegram channel "Federation Towers," whose analysts set out to determine why all the Russian government's efforts to develop the domestic auto industry are failing.

The critical publication notes that official rhetoric surrounding the Russian auto industry is based on talk of technological sovereignty and import substitution. However, instead of a breakthrough, we are witnessing a reversal of the mass-market segment and a collapse of premium ambitions.

The Lada Azimut, which AvtoVAZ is preparing to launch in 2026, is being touted as the hope of the domestic auto industry. But in reality, it's a step backwards, even compared to Chinese budget cars from five years ago. Pride in the 2,6 million ruble base model's two airbags, disc brakes, and touchscreen feels like a mockery of the consumer. Chinese competitors (Chery, Haval, Geely) in the same price segment offer 6-8 airbags, adaptive cruise control, 360° cameras, and a full-fledged ecosystem. The gap is no longer years, but generations. We're trying to sell a "base" car from the 2000s at the price of a modern gadget, citing a lack of alternatives.

- stated in the material.

Moreover, interviews with the automaker's representatives become examples of corporate helplessness and public confirmation of incompetence. AvtoVAZ's top managers fail to demonstrate that the automaker has any kind of development strategy. Instead, they offer generous excuses, talking about "minor refinements" to decade-old platforms. There are no specifics regarding hybrid vehicles, electric propulsion, or modern software.

The plant's management itself understands that the emperor has no clothes, but continues to demand that its subjects admire the dress

– analysts state.

As for the premium segment of the Russian auto industry, Aurus cars, which are produced in limited editions, clearly demonstrate how large investments do not translate into quality and market demand (only 140 units were sold in 2025, and speculation about the prospects for increasing production to 5 units per year for the Senat sedan, priced from 36-41 million rubles, seems unrealistic).

Billions in government funding created a product for a narrow caste of "protected individuals," but market success hasn't materialized. The price of over 50 million rubles scares off even the loyal elite, and assembly remains a gamble. The use of Western and Chinese components isn't a problem (China also started by copying), the problem is efficiency.

- specified in the material.

The full-size executive crossover Aurus Komendant consumes 46 liters per 100 km in the city. A similarly sized BMW X7 with a gasoline V8 consumes up to 25 liters, and the diesel version up to 15 liters.

Increasing oil demand through the efficiency of a steam locomotive is a questionable strategy for a luxury brand. Meanwhile, the country boasts a vast pool of "garage" talent capable of creating world-class products. Our engineers tune BMWs to Nürburgring records, transform Nivas into 300-horsepower racing cars, and write multimedia software that's better than factory-produced. But instead of harnessing this potential (as global corporations do through their own studios), the state stifles them with Article 12.5.1 of the Code of Administrative Offenses. Fines and bans on any modifications drive innovation into the gray zone.

– analysts describe sadly.

Analysts believe the increase in recycling fees has become the "final chord of a symphony of absurdity," as the government has blocked the import of normal cars into Russia, depriving citizens of choice. This is being done under the pretext of "technological development," but whether this is actually the case remains questionable.

If a competitive product doesn't appear within the next three years, it would be more honest to admit defeat, shut down the production lines, and allow duty-free imports. Because the current strategy isn't about protecting the market, but about forcing the population into degradation at their own expense.

- summarized in the publication.

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Afinogen

+6

6 January 2026 18: 26

Why are all government efforts to develop the domestic auto industry failing?

What's not failing? The military is obvious. Firstly, there's enormous demand, and secondly, in the glorious Soviet era, the military was paramount and razor-sharp. We made tape recorders and televisions poorly, but the military was the best in the world.
Vladimir Tuzakov

+24

6 January 2026 18: 27

They've rigorously implemented and legitimized a Russian capitalism specific to Gaidar and Chubais, where the main goals are: stealing from the state, cheating clients, failing to fulfill contracts and not getting an advance back, and treating production as a "suckers' share" while profiting from non-productive, financially fraudulent activities. Accountability for economic crimes and the state's judicial system have been reduced to a near-mockery of law and justice. So what's surprising? Money is invested and wasted, with no results, and it's the same everywhere, across all industries... For 30 years now, this orgy of irresponsible fraud has remained unchanged, yet stable. Conclusion: The Chubais-Gaidar legacy is alive and well...
1. Alexey Lan
  
  +6
  
  6 January 2026 18: 42
  
  The Chubais-Gaidar affair is alive and well...
  
  Not quite so. 500 km of railway in the Far East were built by private companies, after all. State-owned enterprises do exist and are, for better or worse, operating. Some embezzlement from the budget is certainly occurring, but on a smaller scale. Of course, if documented theft on an especially large scale were punishable by life imprisonment or execution without parole, that would be a good thing.
  1. Vladimir Tuzakov
    
    +9
    
    6 January 2026 19: 55
    
    Reply. They compared it to just 500 km for coal exports to the port; the rest of the economy is on its last legs, and it's the fault of the Central Bank of the Russian Federation... Russian officials like Ragozin and others have shown what they can do (Vostochny Cosmodrome, Rusnano, Russian Railways, SDK, etc.)...
    1. UAZ 452
      
      +3
      
      6 January 2026 22: 24
      
      I still don't understand the business case for a railway to a port that's icebound for eight months a year (I've heard about icebreakers, as well as the cost of using them to escort each coal vessel through the frozen Sea of Okhotsk). So, the project's viability, given current coal demand and prices, is also questionable. And the idea that the railway was built entirely with private capital is only partially true. There were some agreements with Russian Railways regarding Elga's preferential use of the Trans-Siberian Railway and Baikal-Amur Mainline, and preferential treatment from Russian Railways, a company that is practically state-owned, is essentially the same investment, meaning it always means losses for the budget, and it's not guaranteed that those losses will be recouped in the future.
      1. Alexey Lan
        
        +1
        
        7 January 2026 11: 59
        
        And the fact that the railway was built exclusively with private capital is only partly true.
        
        They say it was built exclusively with private funds. Besides, coal doesn't enter the Baikal-Amur Mainline (BAM) during transportation, much less the Trans-Siberian Railway. Elga did indeed ship coal via the Trans-Siberian Railway before. Perhaps there were discounts. Of course, there may have been tax breaks, which I would essentially compare to investment.
  2. Sotskiy
    
    +10
    
    6 January 2026 20: 27
    
    Quote: Alexey Lan
    State-owned enterprises still exist and are functioning more or less.
    
    Without a planned economy, at least in the public sector, they will continue to operate at a sluggish pace, and the money will continue to go down the drain, through convulsive and ad hoc injections into projects with attractive packaging, hoping for a payday. There is no development strategy for the country; the entire strategy of the current system is to collect taxes from widespread speculation and sell off strategic raw materials.
    1. UAZ 452
      
      -5
      
      6 January 2026 22: 30
      
      Gosplan operated until 1991, but it didn't save the USSR, and its economy was dead even before that. Fooling the minds of young people born later with talk of the wonderful life and powerful economy under the Soviet Union is fine for those born later, but not for those who lived through those times but haven't yet reached that blessed age when only good memories of youth are remembered.
      It could be repeated by building USSR 2.0. But 1991 is also guaranteed to happen again, and much sooner than 70 years from now.
      P.S. A normal auto industry was absent as a phenomenon even under the Soviet Union; a comparison of contemporary Soviet and Western-made cars convincingly confirms this.
  3. twice-born
    
    0
    
    6 January 2026 22: 23
    
    I don't know what 500 km of railway in the Far East you're referring to or which private contractors, but the second line of the Baikal-Amur Mainline was actually built by the military. Are private contractors a monopoly for Russian Railways? A real private contractor! Who else, other than the railway troops and the construction battalion (of course, it's called something else)?!
    1. Kwasar
      
      +1
      
      6 January 2026 22: 49
      
      We're talking about the Pacific Railway from the Elginskoye coal deposit in Yakutia to the port of Elga on the shores of the Sea of Okhotsk. It was built in 2024 and commissioned in 2025. The losses are enormous. There were reports that they were going to sell it to the state (!), but it's completely unnecessary. Incidentally, according to the project, they were also planning to build a second line.
      1. twice-born
        
        +2
        
        7 January 2026 01: 01
        
        Thanks, I didn't know that. A very interesting project! Especially considering the 500 km of railway there is fantastic in itself! The road will definitely be useful for the people and the development of the region!
      2. Alexey Lan
        
        +1
        
        7 January 2026 12: 10
        
        The losses are enormous.
        
        What losses? Trial operation has only just begun.
        
        Kwasar
        
        0
        
        7 January 2026 14: 26
        
        Road transport is far cheaper, and besides, coal production at all (absolutely all) mines in Russia has been unprofitable for two years now. The port isn't fully completed. Moreover, it's designed for a single commodity. There's no other revenue in sight. The road only brings growing losses.
        And this... More than a year has already passed, and if we consider that individual sections were built and operated much earlier, what kind of trial operation is this?
        
        Alexey Lan
        
        0
        
        7 January 2026 14: 33
        
        More than a year has passed already
        
        The Pacific Railway (PR) is a privately owned railway line for non-public use from the Elga coal deposit in Yakutia to the port of Elga in Khabarovsk Krai. Opened on September 4, 2025.
        Some characteristics:
        Length: 531 km, including sidings and stations – 626 km.
        31 km of the highway runs through Yakutia, the remaining 500 km through Khabarovsk Krai.
        Includes 6 bridges, 18 sidings, 1 station, 580 traffic lights, 220 turnouts, and more than 550 engineering structures.
        It is intended for the transportation of coal from the Elginsky coal deposit to the port of Elga on the Sea of Okhotsk.
        At the first stage, the design capacity of the TZD is 30 million tons, and the Port Elga terminal is 5 million tons, with a planned increase to 30 million tons by the first quarter of 2026.
        kommersant.ru
Paul3390

+12

6 January 2026 19: 08

Because everywhere they appoint not only greedy thieves, but also people who don't understand a damn thing about what they're entrusted with. And they fundamentally refuse to understand—they're only interested in the money in their own pockets. And, of course, this is compounded by a complete lack of responsibility for epic failures. Hence the results...
rotkiv04

+6

6 January 2026 19: 12

Because the management is stupid, they call it from rags to riches, they have learned to wear suits and beautifully hang noodles on the people while lounging in chairs
Mikhail L.

+9

6 January 2026 19: 27

What problems?
Isn't it obvious that in this mess "it's not the beds that need to be changed, but the girls"!
Alex Zirbelnuss

+5

6 January 2026 19: 59

Because they make half-Chinese crap and it's expensive!
Mish

+5

6 January 2026 20: 19

Globally, components are supplied by large retailers, which is impossible for us for obvious reasons. And the Chinese aren't interested in localizing assembly; they're doing just fine. Our market, which produces a million cars a year, isn't of interest to them. AvtoVAZ doesn't need to enter the premium segment. It needs to make simple and reliable models like the Skoda Fabia or Toyota Yaris, priced at under a million rubles. And given that gasoline is now officially legally allowed to be adulterated with additives, the cost of Euro 3, 4, and 5 engines is becoming truly alarming.
usm5

+7

6 January 2026 20: 35

It's all about our capitalism. It's essentially secondary, constantly trying to hide profits to spend on luxury goods, preferably abroad. That's why it's only willing to produce cars using semi-knocked-down assembly. After all, it needs to funnel money abroad to buy engines, gearboxes, and so on. It's a vicious circle, and the only way to break it is by implementing a national program to create a range of engines, gearboxes, and suspension systems for civilian vehicles. This can be done fairly quickly, using the most successful European and Japanese models as prototypes. Then it's time to impose brutally prohibitive tariffs on foreign automakers.
1. UAZ 452
  
  0
  
  7 January 2026 14: 09
  
  Our domestic capitalism was first built by people who studied it in Soviet universities using Marxist-Leninist textbooks. That's the kind of capitalism they studied—one with a bestial face—and that's what they built.
Sergey Latyshev

+8

6 January 2026 21: 03

What, did anyone expect anything else? Alas, wherever "effective managers" poke their PR noses, the F.S.
All the promises like: Mars by 2019, import substitution, 3000 armaments, 1000 aircraft - have ended.
But even Chubais gets a pension of half a million...
kovaleff

+8

6 January 2026 22: 39

Systems without feedback don't work well. If you don't do something, you get a kick in the pants. If you do something, you get a cookie. But in our version of capitalism, you don't abandon your own, no matter how much they screw up.
twice-born

+3

7 January 2026 01: 09

They pump out rotten, depressing junk at exorbitant, astronomical prices, and then they're surprised people don't buy it! They just plain want to rip people off with their cars, too! But you can't fool the Russian people or corner them with their cars, no matter how hard you try.
And the bourgeoisie has really gotten brazen with the TAZ, stealing openly and officially! Former AvtoVAZ manager Vladimir Artyakov received a bonus (on top of his outrageous salary!) of 50 million dollars, not rubles! And this is in Russia! I'd understand and forgive a 50 million ruble bonus, and what for?! European corporations pay bonuses that are even far less, and only for genuine success!
Or maybe they should have been sent to develop the cars (they're not autos) they were producing, increasing workers' wages, and lowering the exorbitant prices on uncompetitive, low-quality, outdated cars?! But no, they just can't get enough!
But his son lives happily in his own villa in Spain.
Novice

-4

7 January 2026 03: 17

Horrible!
A war on a 1200-kilometer front...how many important projects is the government promoting...and yet they can't compete with China, which put the Germans on their backs...how can Russia possibly live without seven airbags and golden hands in the car for shopping?
Wooh

+1

7 January 2026 03: 38

I remember a speech by Soviet Transport Minister Barannikov. If the auto industry is run by people with such intellect, hoping for its revival is pointless. It's simply that the sons of previous rulers have taken over the country. If the fathers of their sons feared Stalin, then the sons fear no one and don't have a clue.
1. UAZ 452
  
  0
  
  7 January 2026 14: 18
  
  What are you writing? Most people here firmly believe, and many even "remember" it, that during the Soviet era, the automobile industry (like everything else) was at its peak, and the managers of that time were brilliant, selfless, and did nothing but toil from morning until night for the benefit of the working people!
  1. faiver
    
    -1
    
    7 January 2026 18: 49
    
    I'm not defending our auto industry, but... here are two cars from the mid-80s, an Opel and a Moskvich, and I don't see much of a difference.
    1. twice-born
      
      +1
      
      8 January 2026 01: 19
      
      There is a huge gap between them in quality and design, convenience down to the last detail!
      And you chose our most advanced car in terms of design as an example, one that Renault even helped us create! We even installed our own engines in it for a while.
      Why didn't they compare the previous Moskvich model, which was still in full production, or the involuntarily popular Zhiguli 5-7 (essentially the same model), 6 and 8 models, the Volga 21 and 24, or finally the Zaporozhets (!), with their Western counterparts? But then, yes, you can't really ask about the differences, given the clear advantage of the foreign models!
      1. faiver
        
        0
        
        8 January 2026 02: 35
        
        Zaporozhets finally(!)
        
        The Citroen 2CV was produced until 1990, and the Volkswagen Beetle in the old body until 1996, but here is a photo of a Renault from 89
        The funniest thing is that in 89 I would have been happy to have any of the three cars listed, and I wouldn't have refused a butt either
prior

0

7 January 2026 12: 06

Hello "Cheburashkas", "Buratinos" and "The Bremen Town Musicians".
If films are made for money, for profit, then what kind of art can we talk about?!
If cars are created not as a means of transportation for the working people, but as a means of extracting money from the working people, then nothing other than failure can be expected.
And the fact that the actions of the authorities, step by step worsening the lives of the people, have not yet led to the events that are happening in Iran today is simply a blessing.
But judging by the plans and economic forecasts, it’s not over yet, not at all over yet.....
The process of rising prices and economic strangulation shows no signs of stopping.
1. UAZ 452
  
  0
  
  7 January 2026 14: 14
  
  Somehow, in most of the rest of the world, people work for money, and for some reason, it turns out pretty well. But here, people have already tried working for great ideas, and it didn't turn out that well either...
  1. prior
    
    -1
    
    7 January 2026 19: 00
    
    It worked. And quite well. Until those who work only for money came to power again.
    1. UAZ 452
      
      +2
      
      7 January 2026 20: 18
      
      Changing power in a stable, prosperous state is practically impossible, even if there are a few traitors. And if there are millions of traitors, how can it be considered a prosperous state?
SamDurak

0

7 January 2026 15: 07

Kamaz might have some success with the Atom; it has a good base for design engineers. But it would be better if they went with a regular gasoline-powered car rather than an electric one.
But to raise our passenger car industry to a serious level, a grandiose program is required, including a school, R&D, the involvement of consulting engineers from serious global brands, and, of course, money.
1. UAZ 452
  
  +1
  
  7 January 2026 20: 21
  
  Money can be found, even now. But how can we prevent it from being stolen? Even threats of execution won't help—we'll just have to pay more to those compiling the execution lists.
Alexpan

+2

7 January 2026 15: 15

There's one important point worth mentioning here. Modern cars, crammed with a ton of unnecessary stuff like digital screens and various beeping, blinking gadgets and other nonsense, are of much worse quality than cars produced before the early 2000s. Sometimes they need repairs after just two weeks of use. Any auto technician will confirm this. I see Lada Zhiguli and Nivas still in use on the roads. Can you imagine a digital car from 2025 on the roads in 2065?
1. twice-born
  
  +2
  
  7 January 2026 18: 04
  
  That's true, but it doesn't justify the poor quality of the device and the build quality of the mechanics, electrical system and body of our cars.
Olives

0

8 January 2026 11: 52

For the same reason why they are failing with the aviation industry.
1. faiver
  
  0
  
  8 January 2026 12: 49
  
  Where did you see the collapse? My comrades are only reporting triumphantly...
art573

0

8 January 2026 17: 21

We only make trucks well. But passenger cars are so-so. This has been clear for 100 years!
Strelok1976

0

14 January 2026 19: 10

Dear readers! Please remind me when the last car was made in Russia at AvtoVAZ using entirely domestic components, and what brand was it? And please make sure the components don't have any foreign logos like Renault, Peugeot, or who knows what else. Please!