Strategic automotive alliance of Russia and China: opportunities and risks

The period of active development of the Russian automotive industry from the late 1990s to 2021 ended with the complete shutdown of all assembly plants of automakers from the USA, Japan, South Korea and the countries Europe. As part of the sanctions regime, all Western companies stopped investment projects, sold all assets and withdrew from all joint projects with Russian producers. Uncertainty in the timing of the lifting of sanctions has also given rise to uncertainty in the timing, conditions and opportunities for further development of the Russian automotive industry. Moreover, the very development of the automotive industry in Russia without a new strategic partner, which many of the world's best companies previously acted as, is in question. But thanks to the experience gained from the implementation of the industrial assembly regime and modern infrastructure, a new strategy for the development of the industry until 2035, geographical location and extent, the unique task of finding such a partner can be considered solved by definition. However, the risks for potential cooperation are already being realized. In these unique conditions of new opportunities and unprecedented limitations, the most appropriate time is for the formation of a strategic alliance of Russian and Chinese automakers, because Russia has no alternatives, and China so needs support for its expansion into the global car market.

1. Astafyeva I. A. (2012). Abstract of the dissertation for the degree of Candidate of Economics «Organizational and methodological support for the formation of an effective management system for integrated business structures in the automotive industry of Russia». Moscow: University of Mechanical Engineering, p. 9 (in Russian).

2. Vladimirsky I. (2019). All car factories on the CIS map: statistics of passenger car production in 2018. Autorevue, no. 5 (in Russian).

3. Gavrilov V. (2023). Who drives what? The best-selling cars in China, the USA and Europe. Arguments and Facts, 30.01.2023 (in Russian).

4. Drynochkin A. V., Astafyeva I. V. (2013). The formation of strategic alliances in the automotive industry of countries with economies in transition is the way to increase competitiveness. Izvestia MGTU MAMI, no. 4 (in Russian).

5. Zagorovskaya Ya. (2023). Avtotor loaded the lines with Chinese (in Russian). URL: https://www.kommersant.ru/doc/5797437

6. Zakharov B. (2020). Sunrise and Sunset of TagAZ: the story of one of the iconic Russian car factories. 02.02.2020 (in Russian). URL: https://rg.ru/2020/02/02/rassvet-i-zakat-tagaza-istoriia-odnogo-iz-znakovyh-rossijskih-avtozavodov.html

7. Kalashnikov V. (2023). Furniture transformation of automotive components. Kommersant St. Petersburg, 22.02.2023 (in Russian). URL: https://www.kommersant.ru/doc/5841492

8. Klochko O. A. (2012). International strategic alliances – ​the way to the development of the industry. Problems of the Modern Economy. Economic Globalization and National Security Issues, no. 4, pp. 99–102 (in Russian). URL: https://ideas.repec.org/a/scn/004883/14343920.html

9. Lebedev K. K., Pankratova D. A. (2011). The evolution of industrial assembly modes as one of the conditions for further modernization and development of the Russian automotive industry. Economics of Contemporary Russia, no. 3, p. 126.

10. Loboda V. (2016). Production of passenger cars in Russia in 2008–2016 (in Russian). URL: https://www.autostat.ru/news/28430/

11. Pastukhov V. (2023). Instead of European brands: which models are taking over the Russian car market. RIA Novosti, 21.12.2023 (in Russian).

12. Rushailo P. (2023). Vertical racing. Kommersant–Money, 23.03.2023 (in Russian).

13. Savostyanchik D. (2023). China's car market in pictures and figures: a study (in Russian). URL: https://auto.ru/mag/article/avtomobilnyy-rynok-kitaya-v-cifrah/?utm_referrer=yandex.ru

14. Chuprov A. (2023). The Ministry of Industry and Trade announced the purchase of the Hyundai plant in St. Petersburg by a Russian investor (in Russian). URL: https://www.autostat.ru/news/55726/

15. Shtanov V., Anisimov G., Gribtsova Yu., Buravtseva M. (2015). GM is disappointed in Russia. Vedomosti, 18.03.2015 (in Russian). URL: http://www.vedomosti.ru/auto/articles/2015/03/19/gm-razocharovalas-v-rossii

16. AVTOVAZ bought licenses… (2008). AVTOVAZ bought Renault licenses for 220 million euros (in Russian). URL: https://www.autostat.ru/news/2571/

17. Release of SsangYong all-terrain vehicles… (2013). The release of SsangYong all-terrain vehicles was transferred to the joint venture Sollers–Mazda (in Russian). URL: https://www.zr.ru/content/news/560518 vypusk_vsedorozhnikov_ssangyong_peredali_sp_sollers-mazda/

18. The share of foreign cars of local assembly … (2019). The share of locally assembled foreign cars in Russia is 62%. IA Regnum, 01.10.2019 (in Russian).

19. The Mercedes plant became the first… (2019). The Mercedes plant became the first investment project in the Moscow region. RIA Novosti, 03/04/2019 (in Russian). URL: https://ria.ru/20190403/1552358626.html

20. And twenty years is not a grudge… (2015). And it's not a pity for twenty years: how GM first conquered, and then surrendered to Russia. RBC «Business», 03.04.2015 (in Russian). URL: https://www.rbc.ru/ins/business/03/04/2015/55191c8a9a79477294bba5ab

21. The history of the Russian automotive industry (2012). The history of the Russian automotive industry – ​TagAZ: how the Cossacks assembled cars (in Russian). URL: https://www.zr.ru/content/articles/462568-istorija_rossijskogo_avtoproma_-_tagaz_kak_kazaki_avto_sobirali/

22. How industrial assembly developed in Russia (2006). Kommersant, 03.11.2006 (in Russian). URL: https://www.kommersant.ru/doc/719202

23. There will be no more cars… (2022). There will be no more cars: a major Japanese automaker has left Russia (in Russian). URL: https://konkurent.ru/article/54638

24. Mitsubishi will invest… (2007). Mitsubishi will invest $200 million in the construction of a plant in Russia. AUTONEWS, 29.12.2007 (in Russian).

25. At the facilities of Avtotor … (2022). The assembly of Chinese cars began at Avtotor's facilities. AUTONEWS, 13.12.2022 (in Russian).

26. Car production in 2023… (2023). Car production in 2023 increased by 16%. Autostat, 16.01.2024 (in Russian). URL: https://www.autostat.ru/news/56596/

27. Production of passenger cars in Russia … (2023). Passenger car production in Russia tripled in 2022. IA Interfax, 01.02.2023 (in Russian).

28. RAV4 for 6 billion… (2015). RAV4 for 6 billion: what Toyota is doing near St. Petersburg. AUTONEWS, 30.04.2015 (in Russian). URL: https://www.autostat.ru/articles/21137

29. Reuters: The Chinese auto industry entered six car factories… (2023). Reuters: the Chinese car industry has entered six car factories in the Russian Federation and does not intend to stop. Business Petersburg, 20.07.2023 (in Russian).

30. The Russian Haval plant has been released … (2022). The Russian Haval plant has reached its design capacity // Analytical agency «Autostat», 10.02.2022 (in Russian).

31. Chinese cars seized Russia … (2023). Chinese cars have taken over Russia. How is China fighting with the United States and Europe for the global auto market? Lenta.ru, 17/07/2023.

32. Sollers and Isuzu … (2018). Sollers and Isuzu invest RUB6 billion in a joint venture (in Russian). URL: https://abreview.ru/ab/news/sollers_i_isuzu_investiruyut_6_mlrd_rubley_v_sp

33. Sollers: dolce vita… (2010). Sollers: dolce vita of the Russian automotive industry (in Russian). URL: https://sollers-auto.com/upload/iblock/725/qr7o6c33j339wh8snqjdr06y0v6404nq.pdf

34. What will happen after the purchase… (2022). What will happen after Sollers buys Mazda's stake in the joint venture. Vedomosti, 10.11.2022 (in Russian).

35. Volkswagen will set up… (2020). Volkswagen will launch three models in Russia: details of the dispute with the Ministry of Industry and Trade are known (in Russian). URL: https://news.drom.ru/Volkswagen‑78640.html

36. AvtoVERCITY. URL: https://auto.vercity.ru/statistics/production/2022/

37. International Organization of Motor Vehicle Manufacturers (in Russian). URL: https://www.oica.net/category/production-statistics/

38.