Wednesday, May 31, 2023

Achieving Putin’s Goal of National Sovereignty for Auto Industry Equivalent to Stalin’s Plan for Socialism in One Country, Patsvania Says

Paul Goble

            Staunton, May 30 – The situation that has emerged since Russia began its expanded war in Ukraine means that achieving Putin’s goal of national sovereignty in the national automotive industry is quite similar to Stalin’s plan for building socialism in one country, according to Vakhtang Partsvania, an economist at the Russian Academy of Economics and State Service.

            “In essence,” he argues, this will mean “a force course toward the archaization of the automotive industry, a decline in production and technological potential, the loss of key competences and knowledge as well as any chance for integrating this sector into the global automotive industry” (

            Prior to February 2022, Russia’s plans for its automobile industry “in some ways sought to keep pace with global trends;” but with the start of the full-scale war in Ukraine, many global automakers and suppliers of components and spare parts began to suspend business in Russia,” with many leaving the country entirely.

            The only country from which Moscow could attract automobile companies to come in and use existing plants was China ; “and with the departure of global automakers from Russia, there has been an impressive growth in sales of Chinese cars,” up from two to seven percent a decade ago to 60 percent or more now, with similar trends in the truck market as well.

            According to Partsvania, “the Russian authorities have been unable to resist this process of complete Sinification of the Russian automotive industry” given sanctions; but they have failed to see that this process “not only undermines the fundamental principles of Russia’s industrial policy and threatens the future of Russian auto makers.”

            “Any interventions aimed at protecting the domestic market and ‘domestic producers’ will primarily be directed against Chinese firms,” a risky move not only in terms of the operation of the sector but for political reasons as well, the economist continues.

“Until February 2022, the Russian automotive industry was a competitive industry with all the prospects for full integration into the global automotive industry. Today, there is no one to negotiate with except ‘the Chines,’, and to achieve similar effects with Chinese automakers, the government will need years of meticulous work, the success of which is not at all obvious even if we proceed from peacetime conditions and the absence of sanctions.”

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