Vladimir Putin Is Killing The Russian Car Industry

The Morning ShiftAll your daily car news in one convenient place. Isn't your time more important?

This is The Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place every weekday morning. Or, you could spend all day waiting for other sites to parse it out to you one story at a time. Isn't your time more important?

1st Gear: Not Like The Russian Car Industry Is Great

Russia has produced many cars, but with a few exceptions (GAZ-21, Lada Niva) they've rarely produced any car you'd consider great. That's why the influx of foreign investment and knowledge was so important to what looked like was going to be a growing car industry in Russia for this decade.


Yeah, not so much now.

Vladimir Putin's strong defense of freedom and self determination, which some western commenters have misrepresented as him just being a huge dick to fuel nationalistic Russian tendencies in an attempt ot expand his power at the expense of nearly anything else in a country whose history has bee shaped by a seemingly endless cycle of totalitarians, has had a negative impact on car sales.

This Bloomberg report on Lada's fate nicely sums up the effect of all this drama.


Russia’s Industry Ministry said two years ago that car sales in the country in 2014 would surpass the roughly 3 million cars sold in Germany this year. As Russia’s economic growth comes to a halt amid trade sanctions stemming from the government’s disputes over Ukraine, research company IHS now forecasts that the car market won’t reach the 3 million mark until 2018.

Auto-industry executives are forecasting a contraction exceeding 10 percent in Russian demand this year. Volkswagen AG, Europe’s biggest carmaker, is predicting an industry drop of as much as 18 percent to 2.1 million vehicles, Marcus Osegowitsch, head of the German company’s Russian business, told journalists today at the show.


The result? We may see a "Cash 4 Clunkers" type program or other government incentives to stoke demand for cars.

2nd Gear: GM Goes Back To Spring Hill


Remember Saturn? Remember how they'd build some of their cars in Spring Hill, Tennessee? GM let the plant whither along with Saturn, but now the company is expected to reinvest in the facility.

The Detroit News has the details:

The factory, designed to be flexible enough to build most any vehicle in GM’s lineup, was promised $350 million in investment, 1,800 additional or retained jobs and two new vehicles. Wednesday, GM is expected to further sweeten the deal.

At an event attended by the governor and other officials, GM is expected to announce additional investment and jobs. It has been widely speculated that the carmaker will move production of the Cadillac SRX from a plant in Mexico to Spring Hill and transfer GMC Acadia production from GM’s Lansing Delta Township plant.


3rd Gear: GM To Introduce Bike Sharing To Warren Center


Hey, Spring Hill, maybe you'll grow so big that one day you to will get a bikeshare program like GM's Warren technical center.

Per Alisa Priddle:

Zagster, a Cambridge, Mass., company that initiated a similar program last year with Rock Ventures, will provide bikes throughout the 330-acre GM Tech Center to give employees an option other than walking and driving to meetings held among 61 buildings.

“GM is investing not only in the long-term health and productivity of its workforce, but sending a strong message to other employers around the country that bike sharing is a mainstream transportation option for employees,” Timothy Ericson, cofounder and CEO of Zagster, said in a release.


I'm doing my best to institute a Razor-sharing program at Gawker Media's main office.

4th Gear: We'll Form Our Own Union, With Hookers And Blow!


The anti-UAW workers at Volkswagen's Chattanooga plant in Tennessee say they're planning to form their own union to combat the UAW chapter that ended up there anyways despite a vote against them.


The anti-union union will be the first chapter of what's being called the "American Council of Employees," which is basically the Democratic People's Republic of Korea of organized labor and couldn't sound more like a Koch Bros-funded front if they tried.

A spokeswoman for Volkswagen replied by knocking herself in the head repeatedly with a hammer until the reporters agreed to stop talking about unions.


5th Gear: Kia To Get A Plant In Mexico


South Korea was a great place to make cars when the won was basically worth nothing and people weren't constantly going on strike. Now, not so much, as the yen has dropped relative to the won and workers in that country are demanding wages consistent with Kia's growth.

Alas, there is a magic place called Mexico where the currency rarely appreciates and the workers are just happy to not be in a cartel. And guess what friends, Kia is going there.


Details are scarce at the moment, but it'll be a big facility that makes a lot of things.

Reverse: In 1937!!!

On August 27, 1937, Captain George E. T. Eyston breaks his own automobile land speed record at the Bonneville Salt Flats in Utah, raising the mark to 345.49 mph.




Neutral: Is Russia's Car Industry Worth Saving? I mean, do we really care about Lada?

Photo Credit: Getty Images

Share This Story

Get our newsletter