Good fairy

As soon as he began to exercise the premier's powers, the former president developed a storm of activity. Moreover, as usual, he began with the "distribution of elephants" and the fulfillment of the desires of various kinds of lobbying groups.

The first gift of the “good fairy” was in store for the oilmen, who were so exhausted under the yoke of unbearable taxes and export duties that they could not even invest in the exploration of new fields. Their tax burden has been reduced. Car lobbyists were next in line. And now the prime minister is rushing to the Alabuga special economic zone in the city of Yelabuga, leading officials to the Severstal-Avto plant, driving his faithful retinue around the shops in a brand new car and immediately holding a production meeting dedicated to the problems of the industry. It is easy to guess that there were not without specific promises. In a short but energetic speech, the prime minister recalled the importance that the auto industry plays in the country, and also assured the audience that the government would not leave the domestic manufacturer, but would nurture and protect it. So that at least four-fifths of the cars sold in the country are immediately produced. The task is ambitious, considering that today only about 40% of the market belongs to cars assembled in Russia. If we also subtract the “screwdriver” assembly of foreign brands, then less than a quarter will remain at all.

It would be fine, if the government would bake for itself about the auto industry, if it likes it so much. But campaigns in support of domestic producers usually do not have the best effect on domestic consumers. Since these campaigns end, as a rule, with the introduction of prohibitive import duties on certain goods that compete with similar ones, but produced domestically. Consumers end up without imported goods, which, as a rule, were cheaper and of better quality. On the other hand, the notorious domestic manufacturer, devoid of competitors, can continue to churn out a product of little use, and even regularly raise its price, citing rising costs.

Actually, intending to support the domestic auto industry, Vladimir Putin did not invent any bicycle. One of the main measures is prohibitive duties on used foreign cars older than 5 years. For people with a good memory, this measure will inevitably cause an association with another campaign to support Russian car manufacturers, which ended in 2002 with the introduction of prohibitive duties on used foreign cars older than 7 years. Then they were considered the main competitors of the domestic Volga and Lad. Interestingly, this did not help Russian models to conquer the domestic market. The share not only did not grow, but also fell over the past six years.

The increase in duties on used foreign cars, coupled with the growth in incomes of the population and the rapid development of car loans, only raised interest in new foreign cars. Moreover, the growth of the market turned out to be so strong that today there is practically not a single world automobile concern that would not start or would not plan to start assembling its models in the country. As for domestic models, they only rose in price from the level of seven-year-old foreign cars to the level of five-year-old ones, without adding much in quality.

Trying to protect the Russian auto industry from competition, the government not only deprives the least wealthy category of citizens of the choice between the new Lada and some Toyota of 2003, but also does a disservice to the industry itself. There is the experience of the United States, where, back in the 1980s, the authorities tried to protect automobile concerns from competition with Japanese and European manufacturers: the result was a protracted crisis in the industry, which continues to this day.