Russia’s car tycoons look to China for a lifeline to restart production in bid to nurture Europe’s biggest vehicle market
- Art-Finance and Avtodom Group are looking for partners to restart production
- The obvious solution would be to bring in Chinese companies, but convincing them to invest may prove difficult without government subsidies
When international companies began fleeing Russia following Vladimir Putin’s invasion of Ukraine, Andrey Pavlovich and Andrey Olkhovsky joined a wave of entrepreneurs seeking to profit from the exodus, scooping up car plants left behind.
Now they’re seeking to restart output in a country that produced some 1.5 million vehicles annually before the war and once aimed to become Europe’s biggest auto market.
Pavlovich’s Art-Finance, which bought factories from Hyundai Motor and Volkswagen, and Olkhovsky’s Avtodom Group, the buyer of Mercedes-Benz Group’s Russian operations, are both looking for partners. The obvious solution would be to bring in Chinese companies, but convincing them to invest may prove difficult without government subsidies.
“I have a feeling they overestimated a bit their capabilities,” Sergey Burgazliev, a Russian-based independent consultant with more than 20 years of experience in the auto industry, said about the assets Art-Finance and Avtodom bought. For Chinese carmakers, exporting finished vehicles from the Asian nation is more profitable than building them in Russia, and Moscow would need to give them special benefits to attract them, he explained.
The Russian Industry and Trade Ministry did not respond to questions from Bloomberg News.