Foreign Investment into Russian Automotive Industry

1423
DOI: 10.20542/0131-2227-2016-60-6-61-69

Yu. Baronina, Primakov Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation (ubaronina@mail.ru

Acknowledgements. The article has been supported by a grant of the Russian Science Foundation (project № 14-28-00097 “The optimization of Russian foreign investment ties in the context of deteriorating relations with the EU”).


Abstract. This article analyzes the scope and localization of foreign investments into foreign Russia automotive industry. Since 2000s many transnational automotive companies has implemented their assemble-cars-projects in Russia. Large population, low level of motorization and reduction of taxes on auto components became significant factors for attracting investors into the industry. As a result, by 2015 the share of locally-made foreign models increased to 52%.By the end of 2015, there were 16 plants producing cars of foreign brands. Depending on the volume of investment and the method of project`s implementation, all enterprises can be divided into several groups: assembly without significant FDI, joint ventures with national companies and FDI to construction of full cycle factories. Among these groups there are enterprises established on the basis of old automobile centers, at the facilities of non-core plants, and newly-built factories. Also, the article analyzes development of the automotive industry in a difficult economic and political situation in 2014-2015. Falling consumer demand for products led to a significant reduction in companies’ revenue, and many of them had to stop the assembly operations. At the same time, Chinese companies entered into several agreements to build a plant in Russia. During the period from January to November 2015, the Russian market of new vehicles reduced by 34.5% as compared to the same period in 2014. The Russian government decided to resume the state recycling program in September 2014 to contain the continuing fall in demand. Later, in April 2015 a state program of preferential car loan was entered to further car market support. 

Keywords: automotive industry, foreign investment, joint venture, Russia 


Registered in System SCIENCE INDEX

For citation:
Baronina Y. Foreign Investment into Russian Automotive Industry. World Eсonomy and International Relations, 2016, vol. 60, no. 6, pp. 61-69. https://doi.org/10.20542/0131-2227-2016-60-6-61-69



Comments (0)

No comments

Add comment







Indexed

 

 

 

 

Dear authors! Please note that in the VAK List of peer-reviewed scientific journals, in which the main scientific results of dissertations for the degree of candidate and doctor of sciences should be published for the “MEMO Journal” the following specialties are recorded:
economic sciences:
5.2.5. World Economy.
5.2.1. Economic Theory
5.2.3. Regional and Branch Economics
political sciences:
5.5.4. International Relations
5.5.1. History and Theory of Politics
5.5.2. Political Institutions, Processes, Technologies

 

Current Issue
2024, vol. 68, No. 3
Topical Themes of the Issue:
  • Bretton Woods 2.0: Towards a New Global Financial Architecture
  • Transformation of the EU Political Party System on the Eve of the 2024 European Election
  • South Asia in Regional and World Politics
Submit an Article
INVITATION FOR PUBLICATION
The Editorial Board invites authors to write analytical articles on the following topics:
  • changes in the processes of globalization in modern conditions
  • formation of the new world order
  • shifts in civilization at the stage of transition to a digital society

The editors are also interested in publishing synthesis articles / scientific reviews revealing the main trends in the development of certain regions of the world - Latin America, Africa, South Asia, etc.