| The heads of the country's leading automobile plants told the Vremya Novostei newspaper what needs to be done to develop the industry. The main conclusion: we need to import technology.
Chairman of the Board of Directors of AvtoVAZ Vladimir KADANNIKOV:
-- After the dismantling of the system of state management of the economy, enterprises in industries that had high export potential, mainly raw materials, were the first to adapt to the new conditions. The consumer goods sector, including the production of passenger cars, found itself in a difficult situation. Since the 1980s, the Soviet economy, drained by the arms race, has been unable to invest resources in modernizing this sector. In recent years, we have observed a gradual transition from the exhausted economic policy of financial stabilization to the formation of a new paradigm for the accelerated balanced development of the country's economy. This is accompanied by the development of a number of conceptual documents at the industry and national level.
The automotive industry, by delivering the final product to the end user, occupies a position at the top of the value chain and, as a result, is highly dependent on what is happening in other sectors of the economy. In this regard, we can say that the concept of development of the Russian automotive industry is a necessary element of state policy for the automotive industry, but not sufficient. Therefore, we are closely and interestedly following ongoing discussions on strategic issues of economic development in the broader context of industrial policy.
Along with the imbalance between the raw materials and manufacturing sectors of the economy, the source of the problems of Russian industry is another major imbalance: the discrepancy between the scales of the industrial and financial sectors. Neither the stock market nor Russian banks have the potential necessary to serve large businesses and, obviously, will not have it in the foreseeable future. The Russian stock market remains very “narrow”, and its investment potential does not meet the country’s needs. By the end of last year, the capitalization of the stock market was $70-75 billion, which is comparable to the market price of one large foreign company.
Marketing Director of GAZ OJSC Viktor MASLENNIKOV:
-- The formation of the car market in Russia is currently taking place under the influence of several important socio-economic factors. Firstly, ongoing economic reforms are forcing Russian automotive manufacturers to carry out structural restructuring of production taking into account market requirements. Secondly, this is competition from foreign manufacturers, some of which are pursuing an aggressive policy in the Russian market, and are also planning to organize joint ventures for “screwdriver” assembly. Thirdly, due to the stagnation of economic development, the low level of income of many sectors of the economy and the bulk of the population, further growth in car sales is to a certain extent related to the dynamics of income and GDP growth. Consequently, the problems of the development of the national automobile industry cannot be considered only as particular difficulties of individual plants. Macroeconomic factors play a big role here: the stability of the national currency, targeted financing of the real sector of the economy, reducing the tax burden on manufacturers, increasing the well-being of Russians. In relation to industrial enterprises, it is necessary to avoid extremes: on the one hand, unjustified measures of state support for inefficient production, on the other hand, purely fiscal operations to extort debts from still operating enterprises.
In 2001, the President of Russia called the production of high-quality and inexpensive cars the main task of the Russian economy. To achieve this goal, it is necessary to solve a number of problems. First of all, measures need to be taken to protect the domestic market. Our market must be protected from junk cars, which may flood into Russia after January 1, 2006, when the European Union begins to get rid of used cars everywhere. Russians' demand for cars should be satisfied primarily by Russian automakers, and not by foreign companies importing used cars. To bring all this to life, government support is needed. Automakers hope for preferential customs duties on imported equipment and components that have no analogues in Russia. The most pressing areas of development today are attracting investment for technical re-equipment and creating joint ventures for the production of components that meet the highest requirements. One of the main tasks is to lobby the interests of producers in government and legislative authorities.
General Director of Severstal-Auto Vadim SHVETSOV:
-- The development of the Russian automobile industry this year was helped by factors of a general economic nature: stability, economic growth and a fairly noticeable increase in household incomes. Of course, limited access to the used import market as a result of increased duties played a role. However, it would be a mistake to believe that these measures were only a means of support for domestic car factories - they created a more civilized and favorable environment for foreign car companies to enter the Russian market. At the end of the first half of the year, for example, significant growth was noted in the segment of new foreign cars and joint ventures producing foreign models or cars under an imported brand. And this once again confirms the trend that we have observed in the last year or two: the consumer is willing to pay more for more modern and high-quality foreign cars, especially since with the development of lending schemes they are becoming more accessible.
I am sure that the prospects for the development of the Russian automobile industry are connected with the arrival of foreign automobile companies here. Only they can bring the main thing that Russian manufacturers lack - modern technologies and knowledge that allow them to produce high-quality cars and components for them and effectively manage production. Without this, the Russian automobile industry will never catch up with the technological gap that we see today. To do this, it is necessary to stimulate the localization of global manufacturers in Russia. I don’t think that we will go for a complete closure of the market due to a sharp increase in duties - as was the case, for example, in China or Brazil. Therefore, it is necessary to focus on other investment incentives - reducing the administrative burden on business and simplifying the procedures associated with starting a project. It may be worth considering providing very limited local customs or tax benefits that would reduce the payback period for projects (in the automotive industry, as is known, this period averages at least five years). Particular attention, in my opinion, should be paid to the development and attraction of foreign investment in the component industry, which in general is in very poor condition in our country. At the same time, using the example of other developing countries, say the countries of Eastern Europe, we see that the production of auto components can become a very effective segment of industry, not only satisfying the domestic needs of automobile assembly plants, but also actively working for export.
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