High rank representative claims going back to Russia unachievable for Western carmakers
Date
9/18/2024 8:24:06 AM
(MENAFN) Western automobile manufacturers that exited the Russian market following the onset of the Ukraine conflict are unlikely to find it feasible to return, according to First Deputy Prime Minister Denis Manturov. Major brands such as Germany's Mercedes-Benz, France's Renault, and Japan's Nissan made the decision to leave Russia in 2022 in response to sweeping sanctions imposed by the United States, the European Union, and other nations against Moscow. Although these companies sold their assets to Russian firms or transferred them to the government, contracts included buyback clauses that theoretically allow them to reclaim their businesses in the future.
However, Manturov, who has a background as the former minister of industry and trade, expressed skepticism about the practicality of such returns. He pointed out that the departure of these carmakers left a vacuum in the market that has since been filled by other manufacturers offering more attractive terms. “The carmakers simply ran away, slamming the door. Yes, they do have buyback options, but I very much doubt that a return is realistic and feasible. The firms that have replaced them have offered much more favorable terms,” he stated in an interview with Vedomosti newspaper.
His remarks followed the recent Eastern Economic Forum (EEF) held in Vladivostok, which drew high-level delegations from countries like China and India. Notably, China has emerged as the largest foreign supplier of vehicles to Russia over the past two years. Brands such as Chery, Haval, Geely, Changan, Exeed, and Omoda have successfully entered the Russian market, effectively replacing European, Japanese, and Korean manufacturers that have exited.
As the Russian automotive landscape evolves, Manturov's comments reflect a broader trend of shifting alliances and market dynamics influenced by geopolitical tensions and economic sanctions. The future of Western carmakers in Russia remains uncertain, with the local market adapting rapidly to the new reality.
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