Russian automotive industry and industrial policies: one story of misunderstanding

Russian automobile industry has recently become a hot topic among scholars and businessmen as it is known to be significantly lagging behind the rest of the world. This gap is evaluated by industry experts to be at least 10-15 years of progress. After the USSR era, Russian automobile industry was (and actually still is) in deplorable condition. It was based upon protectionism, artificial restriction of competition and complete disregard of customers’ interests, and consequently suffered even more from the current crisis, or practically, never recovered from one since 1980s. Just about ten year ago, under the threat of complete collapse of the automotive industry, Russian government took some urgent measures, such as creating policy initiatives, protectionist measures, but mainly bailing out Russian automobile giants, which haven’t ever been restructurized since probably their foundation. The puzzling outcome from these actions is that industry is still almost in the same condition as before. So the main question which I would like to address with my paper is: why industrial policies for the automotive industry do not work in Russia? Following the leading scholars in the industrial policy studies, I am interested mainly not in the outcome of the policies, but in the process itself. I will try to reveal possible implementation mistakes of industrial policies, miscommunication between main participants involved or other factors, which led to unsatisfactory results. Understanding of this “fatal mix” is very valuable as Russia remains the largest unsaturated and attractive market in CEE. To answer the main question, I intend to perform longitudinal analysis of the Russian automobile industry of the years 2000-2010, and use content analysis of literature and Internet sources, which will allow me to sort out the empirical data, combine historical studies with economic perspective, and achieve substantial results.