International Production in the Russian Automotive Industry

The paper aims to analyze the situation in foreign automobile production in Russia in the context of foreign policy restrictions, economic uncertainty, and the COVID-19 pandemic. The author used statistical data on the production of cars in Russia by local and global brands, decisions of the government and the President of Russia, and expert assessments. The research found that in 2020 the Russian market experienced the largest decline in car production over the past few years. Simultaneously, the decline in production was more significant than the decline in demand due to the impact of negative macroeconomic factors. The author concludes that foreign car manufacturers, despite the scale and great potential of the Russian market, are reducing their presence in it. As a result, there is a general decline in car production because the market share of Russian manufacturers is less than 50%. This trend of reducing production and the interest of foreign manufacturers in the Russian market was noted during the pandemic and confirmed by statistical data and expert assessments. In the current situation, it seems appropriate to reduce the level of localization to attract foreign automakers. However, due to the tightening of sanction restrictions, this seems unlikely on the part of European and American manufacturers. Simultaneously, Russia can expand cooperation with automotive companies from Southeast Asia and thereby neutralize the sanction restrictions. Measures to stimulate the domestic car market in the context of the exit from the COVID-19 pandemic are unlikely to be effective. Therefore, it is necessary to focus on its natural recovery, especially considering the fact that in the short term, it will remain unattractive for foreign manufacturers. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023.