Industry Analysis Case Study

Automobile Industry in Russia: The Growth Potential and the Competitive Pressures

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Abstract:
In 1991, the Soviet Union dissolved into different countries and the major country to emerge was Russia. As Russia started to liberalise, its economic policies changed and it gradually moved towards a market-driven economy. Incomes of Russian consumers are rising and they are demanding more choices. Amid this makeover, the Russian automobile industry, which of late was dominated by the state-owned players, is now witnessing a change. Automobile manufacturers around the globe are keen to set up manufacturing facilities in Russia-to serve the Russian market, and also export to different countries. Global players such as Toyota, Nissan, Renault, and Volkswagen plan to set up massive manufacturing facilities in Russia. So, as competition increases, Russian carmakers face numerous challenges to capture the market. State-owned companies like AvtoVaz have to gear up to withstand competition from foreign carmakers.

Pedagogical Objectives:

• To discuss the evolution of the automobile industry - with special focus on cars
• To discuss the political and economic trends since the formation of the Russian federation
• To understand the Russian automobile industry and its growth potential
• To discuss the challenges and competitive pressures in the Russian car industry.

Keywords : Manufacturing industry; Avtovaz; Russian economy; Russian Political changes; Automobile industry; Volkswagen; Russian automobiles; Russian Consumer market; Car industry; Economic crisis; Liberlisation; Globalisation; Automobile manufacturing