Half of Russian car factories did not resume work after the start of the SVO and sanctions
Half of Russian car factories never started operating after the start of the SVO and the imposition of sanctions on automobile production. Kommersant reported this.
Until February 2022, there were 21 large automobile plants operating in the country; they specialized in the development of all segments of foreign cars. At that time, not all foreign investors recouped their investments. Thus, Mercedes or BMW with a site on Avtotor were unable to receive the expected profit. Due to the sanctions, many manufacturers stopped working, but later the assembly of Russian cars resumed.
The authorities tried to transfer assets to new investors, for example, Chinese companies. But they didn’t succeed, since the PRC prefers to assemble its cars in its own country and then send them to Russia.
As a result, the sites went to government agencies: AvtoVAZ and Moskvich, as well as Russian business.
Some experts argue that Chinese manufacturers doubt the size of potential investments and the lack of stability. It is important for Chinese companies to have a presence in a large number of markets, and assets in Russia can be harmful.
In addition, assembling Chinese cars in Russia is problematic, since manufacturers do not want to solve problems, for example, looking for additional parts in China. In a few years, the Russian automotive sector will face a decrease in the volume of enterprises, and some production facilities will have to be repurposed.