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New Course - On Protectionism

2024

Video: New Course - On Protectionism

Video: New Course - On Protectionism
Video: Protectionism easily explained (explainity® explainer video) 2024, March
New Course - On Protectionism
New Course - On Protectionism
Anonim

COMPANIES AND MARKETS

/ OUTLOOK

NEW COURSE - ON PROTECTIONISM

HOW THE STATE WILL SUPPORT THE AUTOMOTIVE INDUSTRY

From one

extremes -

ignoring

industry problems -

government, seems ready

rush into another."

TEXT / ELENA WARSAW

In recent years, we are witnessing the merger of the largest companies, the creation of super-giant companies: without knowing the state borders, globalization is taking over the entire global automotive industry. Russia did not stand aside.

This spring was marked by several automotive projects. They announced their intentions to create large holdings Siberian Aluminum, AvtoVAZ and Severstal. And in early June, a historic meeting of car manufacturers, economists, scientists and government leaders was held with President Putin. This alone is convincing evidence of the importance that today is attached to the development of the industry. But the participants in the landmark meeting did not stop at just a discussion of the problems of the automotive industry. Its result - decisions in support of the domestic auto industry.

We will not delve into the jungle of disputes about whether it is necessary to support it and whether there is anything to support. There is no automobile industry at all, it produces at least a million cars a year, and no less than 10 million of our fellow citizens are engaged in this. So you have to reckon. And the state, if it does not want to remain a raw material, naturally, must create the conditions for the development of its industry - the days of naive faith in the "self-regulation" of the market are over. Therefore, we need to talk about how exactly to support the auto industry and what will give one or another measure.

THIS IS A FASHIONABLE WORD "HOLDING"

came into vogue for a reason. Vertically integrated companies connecting a variety of businesses, in the current conditions, are perhaps the most viable. They keep consolidated financial statements, pay taxes in a consolidated manner. Thanks to a single investment policy, they are able to most effectively distribute funds between partners.

AvtoVAZ, Siberian Aluminum and Severstal, however, each in their own way, are moving towards enlargement and consolidation of production. AvtoVAZ, which has set the task of updating the lineup and, accordingly, re-equipping, seeks to transfer today's models (“classics”, “eighth” family, the old “Niva”) and equipment for their release to other sites. RosLada, LuAZ, Izhmashavto, possibly TagAZ - some of these assembly plants have already begun to operate in conjunction with the Volga Automobile Plant, while some are in talks. Under significantly increasing capacities, AvtoVAZ will also need a new engine production - as part of the holding, a motor plant is required, which, most likely, will have to be built from scratch. To implement a project of such a large-scale cooperation, Togliatti will require more than two billion dollars. The car factory itself today has more than half the sum.

Severstal acquired a controlling stake in UAZ and the Zavolzhsky Motor Plant, intends to participate in the capital of key suppliers of the Ulyanovsk Automobile Plant, thereby covering the production chain “from raw materials to the final product”.

Siberian Aluminum, which last year became a major automotive company (GAZ, Pavlovsky, Golitsynsky and Likinsky bus plants, Volzhsky and Yaroslavsky motor, etc.), has a slightly different approach to business. Metallurgists at first acquired a lot of disparate and even not always interacting enterprises, but now they see the need to combine them into a certain common structure. For its completeness, metalworkers consider it necessary to include UralAZ, MAZ, ZMZ in its holding (Severstal owns its majority stake today). However, until the structure has acquired a clear outline, and for this to happen, state support is required.

Which one? First of all, we are talking about legislation that would allow the creation of holdings. On June 28, 2000, the State Duma adopted the law “On Holding” (it just says, among other things, about tax consolidation). The document was approved by the Federation Council, but the president returned it for revision; the conciliation commission has been doing this for almost a year now. Now, probably, the waiting period will be reduced to a minimum.

It seems that AvtoVAZ also waited for help “from above”, which for several years humbly demonstrated law obedience, paying its previous billions of dollars of debt and several times exceeding their penalties (but how could it be otherwise, if half of the shares plus one is in the pledge of the state!). The authorities, which showed "who is the boss in the house, " were finally satisfied with the educational effect and realized that while the controlling stake in the car factory was in place, there could be no question of serious investments and loans, or the development of the enterprise. And now AvtoVAZ securities have been taken out of bail.

WELFARE MODE -

it is also tax breaks (however, they were waited not only by car factories, but also by all Russian enterprises: income tax was reduced to 24%). In addition, customs duties on the import of imported automotive components and equipment that are not produced in Russia will be reduced. Automobile factories will be freed from the so-called social and cultural life, which is still hanging heavily on their balance sheet. Finally, municipalities will take housing, kindergartens, and cultural centers under their guardianship.

Such measures will not only make the industry more attractive to investors, but will also allow them to channel a lot more of their own funds into development.

The car manufacturers have one goal: to reduce the cost of production as much as possible by increasing its volumes and unification (the cost of the components from which cars are assembled is inversely proportional to the volume of their production). In the meantime, the profitability of the automotive industry is extremely low, the prices for its products are on the upper limit of the purchasing power of Russians, the lineup has long been updated. And without significant cash injections, these problems cannot be solved.

The car manufacturers also expressed their wishes about the state regulation of tariffs for the services of natural monopolies, but it is doubtful that the authorities would dare to take such drastic measures.

But on the other protectionist step, affecting the interests not of a group of “powerful people of this world”, but of thousands of ordinary citizens, the government seems to be resolved. We are talking about raising customs duties on the import of cars older than seven years.

CHANGE OF GREEN LIFE, however, highly controversial.

Now the Russian car fleet accounts for only about 15% of foreign cars. About 200 thousand foreign cars are imported annually (note, among them there are a lot of new and relatively young ones, they can be replaced by models of joint assembly, the projects of which are reviving again in our country). Our car plants produce less than a million passenger cars, and all of them are on sale. Consequently, competition - not only fierce, but also the weakest - is not in sight! Even assuming that by 2006 the Russian auto industry will produce 300 thousand more cars a year, and Europe will begin to abandon old cars, the situation is unlikely to become threatening. Since, according to forecasts, by 2005, Russia's annual demand for cars will increase to one and a half million a year, and by 2010, to 2.2 million.

Therefore, we are not talking about the reasonable protection of the domestic market from external expansion, but about creating greenhouse conditions for our car factories. What can come out of this good undertaking has long been known. Even if the domestic auto industry as a result of such warm care and goes into rapid growth, the case may end, as in the famous story of Garshin. There, a rapidly growing palm tree breaks through the glass roof of the greenhouse and dies from frost.

Obviously: success can only be achieved by creating conditions for competition that are favorable to our automotive industry. But by no means eliminating the competition itself, without closing tightly its own market.

The attention, even somewhat belated, of the government to the automotive industry is encouraging. Not only because this industry is high-tech and high-tech, it covers all areas of industry, and its condition can serve as an indicator of the country's economic well-being. But also because the car is not a simple product. This product, one might say, is social - it improves the quality of life of people.

I really want the state’s concern for the auto industry to be thought out and reasonable. It became not a set of certain “measures” in favor of specific companies, but an economically feasible program that, without conflict with the interests of citizens, would make it possible to produce modern and affordable cars in our country.

SUCCESS IS POSSIBLE, ONLY CREATING CONDITIONS

FOR COMPETITION, FAVORABLE

OUR CAR

INDUSTRIES.

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