A socially oriented non-financial development institution and a major organizer of nationwide and international conventions; exhibitions; and business, public, youth, sporting, and cultural events.

The Roscongress Foundation is a socially oriented non-financial development institution and a major organizer of nationwide and international conventions; exhibitions; and business, public, youth, sporting, and cultural events. It was established in pursuance of a decision by the President of the Russian Federation.

The Foundation was established in 2007 with the aim of facilitating the development of Russia’s economic potential, promoting its national interests, and strengthening the country’s image. One of the roles of the Foundation is to comprehensively evaluate, analyse, and cover issues on the Russian and global economic agendas. It also offers administrative services, provides promotional support for business projects and attracting investment, helps foster social entrepreneurship and charitable initiatives.

Each year, the Foundation’s events draw participants from 208 countries and territories, with more than 15,000 media representatives working on-site at Roscongress’ various venues. The Foundation benefits from analytical and professional expertise provided by 5,000 people working in Russia and abroad.

The Foundation works alongside various UN departments and other international organizations, and is building multi-format cooperation with 173 economic partners, including industrialists’ and entrepreneurs’ unions, financial, trade, and business associations from 78 countries worldwide, and 188 Russian public organizations, federal and legislative agencies, and federal subjects.

The Roscongress Foundation has Telegram channels in Russian t.me/Roscongress, English – t.me/RoscongressDirect, and Spanish t.me/RoscongressEsp. Official website and Information and Analytical System of the Roscongress Foundation: roscongress.org.

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The Car Industry: A New Impetus
6 September 2022
The Russian automotive industry has reached a critical juncture

What do we see today? Supply chains are breaking down. Foreign carmakers and suppliers which localized production here have either suspended operations, or are pulling out of Russia. Of course, this is negatively impacting production and capacity utilization. Due to supply chain disruptions, utilization will suffer a major drop in 2022. And although the fleet is large, it is also quite old... This decline in production and utilization will create a shortfall of 700,000–800,000 cars in 2022. Problems exist, but at the same time, the current situation presents a huge window of opportunity. It’s hard to image another situation in which the industry is provided such a big incentive and new impetus for development — Andrey Tomyshev, Partner, Advanced Manufacturing & Mobility Leader in Strategy and Transactions, B1 Group of Сompanies.

If we speak about a specific moment, we can say that we have indeed already passed the most acute phase of this crisis. After a long period of downtime, and after moving to a four‑day working week, AVTOVAZ managed to resume production in June of this year — Maxim Sokolov, President, AVTOVAZ.

The sanctions storm which the automotive industry is going through is completely unprecedented. The crises of 2009 and 2014 were fundamentally different. Those were merely about a contraction of the market due to a crisis of liquidity, devaluation, and a subsequent increase in car prices. Now we are facing a fundamental rethinking of the main economic growth model for the industry. For the past 15 years, the industry was built using international technology... Today, there are no players: some have left already, and others will do so soon in all likelihood. And we are faced with the challenge of building an entirely different industry capable of withstanding any issues related to external risks – not just economic ones, and probably not even economic in essence — Nikolay Sobolev, Chief Executive Officer, Sollers Auto.

The automotive industry must work towards attaining technological sovereignty

Of course, the main objective we are pursuing is the development of our own expertise in R&D, just as our colleagues are working to catch up on technology. That’s our main priority — Nikolay Sobolev, Chief Executive Officer, Sollers Auto.

Amid the current situation, we are working on developing our own service platform, as well as on multimedia systems which we are now planning to bring to the market. In terms of supplying auto-electronic components, which are key to the automotive industry, we are actively investing resources as a group. We are investing in product research. In addition, we have launched a localization project — Denis Smirnov, General Director, MTS AUTO.

Fundamentally, the Russian Federation has all the prerequisites in place to create a completely self-sufficient and sovereign automotive industry that could meet the country’s transport needs — Eduard Cherkin, Partner, Yakov & Partners.

The automotive industry is in need of new development strategies

In order to capitalize on new opportunities, the Ministry of Industry and Trade is currently working on a new strategy for the automotive industry. The priority of this strategy is primarily to meet the demand for high-quality vehicles in the short and medium term. This means ensuring technological sovereignty and creating a resilient and competitive automotive industry for the long term. Over the long term, there is the potential to not just maintain a trade surplus in the car industry – or at least avoid a zero trade balance – but also to become an exporter of technology — Andrey Tomyshev, Partner, Advanced Manufacturing & Mobility Leader in Strategy and Transactions, B1 Group of Сompanies.

Looking at the moment we are in – a critical juncture not only for the automotive industry, but for all industries and the country as a whole – we of course see that we need to come up with new strategic aims. And in principle this is already being done in line with the President’s order — Maxim Sokolov, President, AVTOVAZ.

In building our strategy, we will strike a sensible balance between integrating ourselves in the global automotive industry, and attaining the technological independence we need in terms of critical technologies. We have always developed on the basis of partnership – it has been our dogma. However, in light of circumstances beyond our control, we realize that the old rules of the game no longer work, and we can put forward and develop new ones — Nikolay Sobolev, Chief Executive Officer, Sollers Auto.

Development is problematic for automotive industry suppliers

Historically, our market was fragmented across several automotive platforms. This restricted the potential for suppliers to develop. Now, as production has declined, this problem has become much worse — Andrey Tomyshev, Partner, Advanced Manufacturing & Mobility Leader in Strategy and Transactions, B1 Group of Сompanies.

The main problem our industry has is that the level of localization overall is low... For new products, we need to create a new component industry. It is good that many component manufacturers left. We have production assets that we can use to build a competitive component industry. And this is key to a successful automotive industry — Nikolay Sobolev, Chief Executive Officer, Sollers Auto.

There is limited potential to export, yet there continues to be a dependence on imports

Major barriers to trading in the biggest and most important markets continue to exist. There are import duties, which make exports uncompetitive. Regardless of anything, places we have traditionally exported to include the CIS, some countries in Southeast Asia, countries in Africa, and some countries in Latin America. In general, trade barriers prevent us from creating a large-scale export strategy. They vary from country to country, but regardless, they are significant — Nikolay Sobolev, Chief Executive Officer, Sollers Auto.

We are fairly reliant on imports when it comes to several types of road construction equipment. What’s more, these are key types of equipment... We are virtually 100% reliant on foreigners when it comes to certain items... We should say that for a range of equipment, our manufacturers have been able to achieve a high level of quality and service. The products are very competitive. They are displacing their Chinese equivalents, and are competing well with the Europeans in certain segments — Alexander Turkov, Managing Director, InfraVEB.

Government support will help the automotive industry overcome current difficulties

I am confident that with the support of the industry’s ministry and the Government of the Russian Federation (including at the regional level), we will ultimately be able to overcome all these difficulties together. AVTOVAZ is already moving from the first phase of dealing with the recent crisis towards ramping up production, restoring the product range, and assembly — Maxim Sokolov, President, AVTOVAZ.

Consumer support is no less important to the automotive industry

It’s not even support for the actual production programmes which is important. The same can be said for the development of our own platforms that I spoke about. What is of primary importance – just as it has been several times before in our history – is supporting demand. Here we can see the great effect achieved through the concessional car financing programme, which was launched by the Ministry of Industry and Trade back in the middle of the summer — Maxim Sokolov, President, AVTOVAZ.

There needs to be a product. There needs to be a national product – an elegant B- and C‑class platform in the mass segments which corresponds to today’s realities, and meets a market demand — Eduard Cherkin, Partner, Yakov & Partners.

Cooperation between automotive manufacturers marks a new milestone in the development of the industry

We need to implement government policy on a very careful, point-by-point basis. That’s so we can allocate investments across various vehicle classes – investments which are made with automotive manufacturing in mind – and not allow any cannibalism between enterprises which will be involved in automotive manufacturing. On the contrary, through synergy and the unification of auto components, we will be able to achieve synergy in this class — Maxim Sokolov, President, AVTOVAZ.

At Sollers, we are ready to work on projects focusing on critical components which are not produced in Russia. And we are ready to do this not only for ourselves, but for the entire industry. This is fundamentally important – cooperation between all automotive manufacturers in the interests of effective localization and deriving the greatest possible benefit from the scale effect — Nikolay Sobolev, Chief Executive Officer, Sollers Auto.

As a whole, we can see that in terms of possibilities surrounding funding, the evolving cooperation process will play a major role, both in terms of broadening and deepening them. There is a shift away from building vertically integrated companies, given the smaller volumes involved in the road construction equipment market and limited opportunities to export and implement so-called platform-based solutions. Cooperation is one aspect of this — Alexander Turkov, Managing Director, InfraVEB.

The material was prepared by the Russian news agency TASS