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The Development of the Automotive Industry in Post-Soviet Countries since 1991

Author

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  • Sardor Tadjiev

    (Osaka University, Japan)

  • Pierre-Yves Donze

    (Osaka University, Japan)

Abstract

This paper discusses the impact of industrial policy on the development of the automotive industry in five post-Soviet countries since 1991 (Russia, Ukraine, Belarus, Uzbekistan, and Kazakhstan). By using foreign trade and production statistics as well as qualitative data on automobile companies from business news, this paper highlights three different paths: success in post-2000 Russia and Uzbekistan, stagnation and struggle for survival in Belarus and Kazakhstan, and failure in pre-2000 Russia and Ukraine. The existence of an automotive industry before 1991 was not a factor in success because most pre-existing firms collapsed after the break-up of the Soviet Union. Instead, the growth of these post-Soviet automotive industries has essentially relied on the presence of global car makers. This research demonstrates that inward foreign direct investment and licensing agreements were fostered by the combination of protectionist policies that made importation uncompetitive and access of global firms to the large Russian market (both direct access and indirect access via a country with privileged access to Russia). This paper also highlights different strategies adopted by foreign firms: whereas the largest Western and Japanese companies invested directly in Russia, companies from China and Korea used Central Asia and Belarus as back doors to enter the Russian market.

Suggested Citation

  • Sardor Tadjiev & Pierre-Yves Donze, 2021. "The Development of the Automotive Industry in Post-Soviet Countries since 1991," Eurasian Journal of Business and Management, Eurasian Publications, vol. 9(2), pages 164-183.
    • Handle: RePEc:ejn:ejbmjr:v:9:y:2021:i:2:p:164-183
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