Looming Retaliatory Sanctions Threaten Western Automakers In Russia

Cameron Aubernon
by Cameron Aubernon

Automotive exports from European and American manufacturers may suffer sanctions by Russia in retaliation for more sanctions imposed upon by the European Union and the United States.

Reuters reports the financial damaged suffered by potential sanctions would vary, with automakers like Mercedes-Benz suffering the most thanks to a lack of local factories in Russia. The move would be in addition to an import ban on food, and was on the table before President Vladimir Putin rejected the proposal.

The automotive ban would give Chinese and Korean manufacturers a chance to make their mark upon a muted market. Western imports made up 27 percent of passenger vehicle sales in 2014 thus far, while trucks and buses took 46 percent and 13 percent of the market.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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  • Th009 Th009 on Aug 19, 2014

    Sales were already down by 17% in the first half, after dropping 5% last year. The economy is tanking and auto sales are going down with it. Lots of people are expecting Russia to become Europe's largest market for new cars, but they keep snatching defeat from the jaws of victory.

    • Astigmatism Astigmatism on Aug 19, 2014

      This. The biggest problem with Russia's car market over the next few years won't be retaliatory sanctions closing it to Western manufacturers, it'll be Western sanctions (and general instability) choking growth in Russia's economy and so draining it of Russian buyers.

  • Toad Toad on Aug 19, 2014

    Making economic deals with a dictator (or populist) only works out as long as you are still useful to the dictator. When you are not longer useful the deal gets ripped up. There is a long list of businesses that have lost their investments when they ran afoul of Putin and suddenly found themselves in tax, legal, or regulatory purgatory. If you choose to do business in Russia you have to be prepared to have it all expropriated with very little notice. Companies only lose assets and revenue; people who have crossed Putin have ended up very dead.

    • Voyager Voyager on Aug 19, 2014

      You know what? It's actually the opposite. As long as dictators are useful to certain interests in the West, their friendship is valued. Remember Donald Rumsfeld visiting Saddam Hussein? Be careful with what you wish for. Libya is a mess after Gadaffi was brought down, so is Iraq. Russia was right with regard to Syria. We will not only need Russia to stabilize the region and get rid of the Moslem fanatics, but the West can do way worse with another autocrat than Putin.

  • Stumpaster Stumpaster on Aug 19, 2014

    First, let's proof those meager three paragraph so that they are actually legible. Second, did you guys notice what sort of cars Putin travels in? And you suggest that Mercedes would suffer from sanctions?

  • Mandalorian Mandalorian on Aug 19, 2014

    The Lada Niva doesn't care about sanctions. The Lada Niva will be in production for 100 years. It will be like buying a brand new Model T off the line in 2008.