Russian Protection Racket

Cammy Corrigan
by Cammy Corrigan

A few days ago, TTAC reported that Vladimir Putin issued an ultimatum to foreign car makers, “invest here or else”. 4 days later, VW announced that they were planning a new assembly line at GAZ, and more capacity at their Kaluga plant in Russia. Coincidence? Probably. But it seems like others are following suit. Pretty bloody quickly.

Reuters reports that Hyundai and Kia are now in talks with IzhAvto about using one of their “distressed” (Reuters’ word, not mine) plants to assemble cars. “We are hoping that the talks will be successful and all the terms including one on location will be agreed,” said Dmitry Peskov, a Russian government spokesperson. The plant in question has a capacity of 220,000 units and the plan is to assemble 45,000 Kia cars and 15,000 Hyundai commercial trucks. Now, surely*, the protectionist measures Putin is installing would keep manufacturers at bay, right? Well not when the market in question is up 9 percent from 2009 and, until the recession of last year, was on course to being the biggest car market in Europe, overtaking Germany. Factors like that change peoples’ views on protectionist measures. Are Putin’s measures actually working? Let’s hope not. It may set a dangerous precedent.

* = Don’t call me “Shirley”!

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7 of 19 comments
  • Jimboy Jimboy on Sep 05, 2010

    Russia would do better to clean up its corruption and thuggery if they want foreign auto investment. Make the business climate more welcoming, rather than threatening. (although, I'm sure Daimler does well there, they seem to love dictatorships and oligarchys) Snipe!

    • Avtopromenade Avtopromenade on Sep 05, 2010

      Who says we want your investment? Especially with all the strings that are usually attached to it. We own your debt remember (not as much as China or Japan, but still). If you don't behave, we'll just call it.

  • Michal Michal on Sep 07, 2010

    Am I the only one who watched the above video and was disturbed by it? It shows an unfortunate young man being severely beaten by a Russian criminal dressed in uniform. The criminal seems to greatly enjoy inflicting grievous bodily harm on the man he's frisking. It's quite possible the victim was killed from either his liver being ruptured or from the full height fall (head trauma) onto bitumen shortly afterwards. When visiting a car web site I don't expect to see a video of attempted or actual murder. Yeah I know, 'toughen up princess' and all. I think I'll go watch some beheading videos.

  • Avtopromenade Avtopromenade on Sep 07, 2010

    TTAC, I want you to fire Cammy over that video s/he posted. If you don't, you will be hearing from my lawyer soon. Tough

  • George70steven George70steven on Nov 24, 2010

    You can walk through the darkest neighborhoods of Beijing without anybody ever coming close to you. It’s quite possible the victim was killed from either his liver being ruptured or from the full height fall (head trauma) onto bitumen shortly afterwards. car insurance quotes