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  #1  
Old Mar 28th 2015, 08:50 PM
MeMyselfAndI MeMyselfAndI is offline
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Default Foreigners exit = win for Russian carmakers?

Foreign car makers are fleeing Russia right now.

Peugeot, Mitsubishi, Citroen: http://www.themoscowtimes.com/busine...ia/518114.html

General Motors: http://fortune.com/2015/03/27/gm-exits-russia/

Volkswagen is also cutting back on production here: http://www.reuters.com/article/2015/...0MJ0ZZ20150323

All this, of course, means many lost jobs.

Volkswagen alone has a huge plant in Kaluga, not far from Moscow: http://www.volkswagengrouprus.ru/en/company/kaluga/

God knows how many families it feeds.

But, who is celebrating?

Russian makers, namely VAZ, the guys who make Ladas.

They just came up with a great new high quality concept, Lada Vesta


Russian car on technical and comfort par with any foreigner, it will destroy any old feeling of inadequacy, they say.

Production already started

and, of course, the less foreign competition for them, the better.

USSR produced cars far worse than the West, yet there were no Western cars here, so, people bought those nasty old Ladas and Moskvichs, those horrible square things

I guess we are heading back there. The Vesta does look much nicer than what they made before though



Maybe this is a good thing... We shall find out soon, I expect.
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Old Mar 29th 2015, 02:12 AM
shekib82 shekib82 is offline
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Default Re: Foreigners exit = win for Russian carmakers?

that's a nice car. Russia should really develop its industry. Your country had a lot of potential. After all it was the world's second superpower during a significant part of the last century. You should accept the world order and start making stuff and doing business.

I would like to see a powerful russian car industry and a plane industry.
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Old Mar 29th 2015, 12:14 PM
MeMyselfAndI MeMyselfAndI is offline
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Default Re: Foreigners exit = win for Russian carmakers?

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Originally Posted by shekib82 View Post
that's a nice car. Russia should really develop its industry. Your country had a lot of potential. After all it was the world's second superpower during a significant part of the last century. You should accept the world order and start making stuff and doing business.

I would like to see a powerful russian car industry and a plane industry.
That is very optimistic of you... I will wait and see how the Vesta does on the market, before making any wishes or predictions.
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Old Mar 29th 2015, 12:41 PM
MeMyselfAndI MeMyselfAndI is offline
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Default Re: Foreigners exit = win for Russian carmakers?

That said, we do make our own airliner now, the Sukhoi Superjet 100



Areoflot flies them

as does a number of other Russian and foreign airlines and governments: http://en.m.wikipedia.org/wiki/Sukhoi_Superjet

Now there will be a new air line to and from Crimea, serviced entirely by Superjets: http://airheadsfly.com/2015/03/22/su...imean-carrier/

Not a bad plane (considering it is made by a company that usually manufactures jet fighters and other combat aircraft )

A bit cramped in my opinion

and I have flown on one.

But, not bad overall. But it isn't a big liner. We have yet to produce a new one of those...
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Old Mar 29th 2015, 07:04 PM
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Default Re: Foreigners exit = win for Russian carmakers?

I think the economic evidence on this is overwhelming. Large industries with large workforces that are heavily protected by governments from any foreign competition tend to produce poor quality products inefficiently.

Cut off foreign car manufacturers and the car industry in Russia will surely suffer.

Btw, Russian fighter aircraft are not 'protected'. They are highly competitive in world markets. It is one of the few areas of higher end Russian military exports that has remained highly competitive on world markets.
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Old Mar 30th 2015, 12:20 PM
shekib82 shekib82 is offline
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Default Re: Foreigners exit = win for Russian carmakers?

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Originally Posted by Michael View Post
I think the economic evidence on this is overwhelming. Large industries with large workforces that are heavily protected by governments from any foreign competition tend to produce poor quality products inefficiently.

Cut off foreign car manufacturers and the car industry in Russia will surely suffer.

Btw, Russian fighter aircraft are not 'protected'. They are highly competitive in world markets. It is one of the few areas of higher end Russian military exports that has remained highly competitive on world markets.
Well not unless they start relying more on foreign markets for their cars, using their local market as a springboard for that purpose.

In Lebanon the cheap Korean cars are best sellers and more and more are buying chinese cars. I think that Russia could enter such a market as well as other third world markets. It would have to compete there against the other manufacturers and improve their cars.

The same will be true of planes and other industries.
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Old Mar 31st 2015, 04:17 PM
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Default Re: Foreigners exit = win for Russian carmakers?

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Originally Posted by shekib82 View Post
Well not unless they start relying more on foreign markets for their cars, using their local market as a springboard for that purpose.

In Lebanon the cheap Korean cars are best sellers and more and more are buying chinese cars. I think that Russia could enter such a market as well as other third world markets. It would have to compete there against the other manufacturers and improve their cars.

The same will be true of planes and other industries.
As I said, I will wait and see how the Vesta does on the home market first, before there can be any discussion of exports.

People here in Russia have almost no trust in domestic auto makers. Supposedly, this one will change everything. I can only hope.
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Old Apr 1st 2015, 07:32 AM
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Default Re: Foreigners exit = win for Russian carmakers?

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Originally Posted by shekib82 View Post
Well not unless they start relying more on foreign markets for their cars, using their local market as a springboard for that purpose.
Reality doesn't work that way. With zero competition in the home market, they will end up making shitty cars inefficiently. They will never sell well outside of home because they will have to face actual competition. Same goes for any or every product except military hardware.

See history of Lada. Lada wasn't a bad car in Russia. It was only a piece of shit when you exported it and compared it to the competition.

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Originally Posted by shekib82 View Post
In Lebanon the cheap Korean cars are best sellers and more and more are buying chinese cars. I think that Russia could enter such a market as well as other third world markets. It would have to compete there against the other manufacturers and improve their cars.
Russian car manufacturers who are government protected are never going to improve their cars to compete with cheap Korean and Chinese made cars anywhere. That just doesn't happen that way.

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Originally Posted by shekib82 View Post
The same will be true of planes and other industries.
It isn't true and never is. Industries with protected home markets tend to be highly inefficient and produce 3rd rate products. That's just a general rule of economics. I'm just not aware of many actual exceptions to this rule.
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Old Apr 1st 2015, 07:41 AM
shekib82 shekib82 is offline
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Default Re: Foreigners exit = win for Russian carmakers?

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Originally Posted by Michael View Post
Reality doesn't work that way. With zero competition in the home market, they will end up making shitty cars inefficiently. They will never sell well outside of home because they will have to face actual competition. Same goes for any or every product except military hardware.

See history of Lada. Lada wasn't a bad car in Russia. It was only a piece of shit when you exported it and compared it to the competition.



Russian car manufacturers who are government protected are never going to improve their cars to compete with cheap Korean and Chinese made cars anywhere. That just doesn't happen that way.


It isn't true and never is. Industries with protected home markets tend to be highly inefficient and produce 3rd rate products. That's just a general rule of economics. I'm just not aware of many actual exceptions to this rule.
yes competition makes industries better and improve products. However the initial large sunk cost in heavy industries sometimes can be helped with government intervention. At least to bring the industry to a level to develop economies of scale and be able to compete with other makers. This is why I am saying that they can use the home market as a spring board to try to tackle the foreign market.

And more to this case, I am sure that in russia people will be able to buy foreign cars, so this car has to compete with them in the local market as well.

One more thing, with all the talk about competition, look at what America did when GM went under? It bailed it out. Why did it do that?
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Old Apr 1st 2015, 07:36 PM
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Default Re: Foreigners exit = win for Russian carmakers?

Quote:
Originally Posted by shekib82 View Post
yes competition makes industries better and improve products. However the initial large sunk cost in heavy industries sometimes can be helped with government intervention. At least to bring the industry to a level to develop economies of scale and be able to compete with other makers. This is why I am saying that they can use the home market as a spring board to try to tackle the foreign market.
This only works when foreign export is the whole goal as it was for Japan and Korea. They had to compete in Europe and USA - that's how they got so good. Once they could compete here, they could compete anywhere.

But Russia isn't doing that. They are protecting the home market and that will not produce competitive products, because the Russian home market is big enough to keep the car makers happy.

Quote:
Originally Posted by shekib82 View Post
And more to this case, I am sure that in russia people will be able to buy foreign cars, so this car has to compete with them in the local market as well.
They will have a foreign tariffs. Thats how you protect the domestic market.

Quote:
Originally Posted by shekib82 View Post
One more thing, with all the talk about competition, look at what America did when GM went under? It bailed it out. Why did it do that?
Because it was deemed to be necessary.

GM wasn't in too bad a shape, it just got caught by the 2008 financial meltdown and got crippled by a debt turnover that couldn't turnover. GM's recovery has been swift and impressive.
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