Automotive exports from European and American manufacturers may suffer sanctions by Russia in retaliation for more sanctions imposed upon by the European Union and the United States.
Reuters reports the financial damaged suffered by potential sanctions would vary, with automakers like Mercedes-Benz suffering the most thanks to a lack of local factories in Russia. The move would be in addition to an import ban on food, and was on the table before President Vladimir Putin rejected the proposal.
The automotive ban would give Chinese and Korean manufacturers a chance to make their mark upon a muted market. Western imports made up 27 percent of passenger vehicle sales in 2014 thus far, while trucks and buses took 46 percent and 13 percent of the market.
The escalating basically started with a couple of airlines foolish enough to fly over a war zone. Why would or should the West become involved in what’s essentially a border conflict? Why should the largest country in Europe by far, the Ukraine, be bothered about keeping people that so obviously want to separate? If those ‘separatist thugs’ consider themselves more Russian, let them. Texas is thinking of seceding. Hell, Scotland is. There are tougher issues to deal with, like IS or ISIS. The West was already wrong in wanting to bring down the dictators in Iraq and Syria.
That’s pretty much what Neville Chamberlain thought, too.
th009 got it right. This is the Sudetenland all over again.
The issue facing Western Europe is that they get so much natural gas from Russia. Finding an alternative quickly is a challenge.
I’m thinking of having T-shirts printed with the text: “This time Sudetenland belongs to Russia”… and have myself a Zastava or something.
+1. All the money, manpower, and munitions in the country is not going to convert ethnic Russians into loyal patriotic Ukrainians. That was the entire point of Russianization going back to the czars. The parties to the conflict should work with a neutral third party and do a village by village, house by house survey of national affiliation and redraw the border accordingly.
Putin already got what he wanted, which was annexing Crimea, a strategically important naval area (i.e. Sevastopol). Everything else in eastern Ukraine is a sideshow which he’s correctly calculated that if he takes too far, the international community will forget about Crimea and just want the violence to end. Russia has no strategic interest there, and all the citizens of that area are nothing more than pawns–it doesn’t matter if they identify themselves as Russian or Ukrainian. The plane was just a big “oops”, and is what happens when you give drunken idiots power and heavy weapons.
Regarding cars, Hyundai will win market share, and maybe the Japanese, too, which ultimately are still indirect “soft power” wins. The economy will shrink though, if trading continues to be rolled back and Russians go back to driving Ladas and eating carp and goulash.
Goulash is a Hungarian dish. Being part of the EU, imports of it are presumably also boycotted.
It doesn’t really matter. The Europeans will drop all their sanctions as soon as the weather turns cold and they want to turn the heat on.
In my opinion the real purpose of the sanctions is to weaken Russian economy and hopefully cause a regime change. The west has had enough of Putin. Despite what the nay-sayers are saying, the sanctions are already having a real effect on the Russian economy and will have a more profound effect in a few months.
This is neither a simple border dispute nor is it Sudetenland. Things would be easier if either of those things were true, but they aren’t.
Russia needed Crimea, and it absolutely opposes a Ukraine that is or could be become a member of NATO. Russia has traditionally regarded Eastern Europe as its own personal buffer zone, and Ukraine’s bromance with the EU has made Putin nervous (and understandably so, from a Russian perspective.)
Sanctions are an alternative to armed conflict, that’s all. Since nobody west of the Ukrainian border wants to die for Ukraine, that’s the default policy.
Russia doesn’t have to conquer Ukraine, just so long as it keeps Ukraine unstable. The thing to wonder about is what we’ll do if the Russians invade eastern Ukraine if it appears that its rebels (i.e. mercenaries) are losing against the government in Kiev.
Meanwhile, the Russian people are foolish enough to applaud Putin’s despotism, so the sanctions aren’t a deterrent and escalation becomes politically acceptable. It’s not pretty.
If it was Sudetenland, then we would know where things were headed and we could raise the stakes with every confidence that conflict was inevitable. The fact that nobody (including Putin himself) quite knows what’s next is the problem.
Moral of the story: Outsiders selling cars in Russia are taking a lot of risks. They may not be worth it.
Sales were already down by 17% in the first half, after dropping 5% last year. The economy is tanking and auto sales are going down with it.
Lots of people are expecting Russia to become Europe’s largest market for new cars, but they keep snatching defeat from the jaws of victory.
This. The biggest problem with Russia’s car market over the next few years won’t be retaliatory sanctions closing it to Western manufacturers, it’ll be Western sanctions (and general instability) choking growth in Russia’s economy and so draining it of Russian buyers.
Making economic deals with a dictator (or populist) only works out as long as you are still useful to the dictator. When you are not longer useful the deal gets ripped up. There is a long list of businesses that have lost their investments when they ran afoul of Putin and suddenly found themselves in tax, legal, or regulatory purgatory. If you choose to do business in Russia you have to be prepared to have it all expropriated with very little notice.
Companies only lose assets and revenue; people who have crossed Putin have ended up very dead.
You know what? It’s actually the opposite. As long as dictators are useful to certain interests in the West, their friendship is valued. Remember Donald Rumsfeld visiting Saddam Hussein? Be careful with what you wish for. Libya is a mess after Gadaffi was brought down, so is Iraq. Russia was right with regard to Syria. We will not only need Russia to stabilize the region and get rid of the Moslem fanatics, but the West can do way worse with another autocrat than Putin.
First, let’s proof those meager three paragraph so that they are actually legible. Second, did you guys notice what sort of cars Putin travels in? And you suggest that Mercedes would suffer from sanctions?
The Lada Niva doesn’t care about sanctions. The Lada Niva will be in production for 100 years. It will be like buying a brand new Model T off the line in 2008.