Putin cronies excited to drive ‘modest’ Russian cars
Joel Gehrke
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Russian officials have decided by acclamation to drive Russian-made vehicles rather than luxury Western automobiles, according to a senior Russian lawmaker.
“Everyone supports this decision,” State Duma Speaker Vyacheslav Volodin said Friday. “We agreed that the deputies will use Moskvitch, Lada, Aurus cars.”
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Volodin and his deputies discovered their enthusiasm for parochial altruism in the auto manufacturing sector amid an ongoing exodus of auto companies, including Volkswagen, Renault, Mercedes-Benz, and Nissan. Some officials, it would seem, felt a temporary pang of desire for the vehicles, but Russian President Vladimir Putin rejected a “totally unacceptable” request for permission to import cars made by the outgoing companies.
“All Russian officials should be riding in domestically produced cars,” Putin said Thursday. “In some ways, they might be more modest than the cars we used in the past. Not a big deal. On the contrary, it will be better.”
Russian authorities are making the best of the Western exodus by regulating the sale price of the companies trying to wind down their operations.
“Russian government rules make it difficult and expensive for foreign companies to get approval to sell their assets in Russia,” the Economist Intelligence Unit explained recently. “In December 2022, the foreign investments subcommittee of the Ministry of Finance announced its requirements for asset sales by companies from ‘unfriendly countries’. The rules include a requirement that the seller offers a discount of at least 50% on the assessed market value, and then pays a ‘voluntary’ transfer fee of 5%-10% of the sale price to the Russian federal budget.”
Putin touted his “buy Russian” requirement in a meeting with representatives from Russia’s manufacturing sector, according to state-run TASS, as Russian authorities seek to weather a storm of economic sanctions imposed by the United States and its allies in response to Russia’s full-scale war in Ukraine.
“This is a wartime economy,” Ambassador James O’Brien, who leads the State Department’s Office of Sanctions Coordination, told reporters Friday. “So the Russian state is propping up the Russian economy in an effort to rebuild Russia’s military for the long term. It’s not doing that well.”
Russian government purchases loom large in the domestic economy, Russian Industry and Trade Minister Denis Manturov acknowledged Thursday.
“Understandably, state-owned companies acted as the main growth drivers through government procurement orders,” he told Putin during a meeting at the Kremlin. “You also put special emphasis on car manufacturing. Indeed, this is a very important sector with a big multiplier effect for other sectors of the economy. Here we also see some recovery.”
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The Kremlin chief emphasized his confidence in the elevated and civic-minded feelings of the officials whose driving habits will contribute to this effort.
“Our officialdom is wonderful, and they should realize that we must strive to develop domestic brands of cars as well as other domestically produced products,” he said. ”This must be the prime direction for improving the standard of living.”