Russia, which has put itself into great trouble with its invasive policy, is brought to the point of complete bankruptcy. So, as a result of the ultimate pressure from the West, the country is isolated in the world market.
Mercedes, Aston Martin, Rolls Royce, and other brands, which were among the luxury cars that used to adorn the Russian markets, have completely left the country today. Let's remind that during the Russia-Ukraine war that started in February, Mercedes was one of the last Western companies to leave the country. Today, along with Mercedes, Ford and other brands are already leaving the Russian market.
It is interesting that not only Western companies, but also Eastern brands such as Nissan and Toyota have joined this trend. The deplorable situation in the country forced the aforementioned companies to sell their shares to local investors and leave the country. For example, Nissan lost $700 million in Russia and had to sell its shares to local investors. In another report, it is noted that the Mercedes company sold a total of 9,558 cars in the country from January to September of this year, making a loss of 72.8% compared to last year. These indicators once again confirm that what is happening in the country's market is related not only to sanctions, but also to the country's loss of purchasing power and the peak of economic backwardness.
- Fiasco Productions
One of the other profitable sectors of Russia is the car manufacturing industry. In the pre-war period, Russia produced more than 100,000 vehicles annually, but according to the latest indicator, the country's production has decreased by 72%. According to the Russian National Industrial Information Agency, only 29,1 cars have been produced in the country in the last month of which 5,100 of them are trucks, 6,600 are light commercial vehicles, 1,100 of them pertain to buses and other vehicles.
Is Russian oil losing interest?
The recent situation regarding the import of oil and gas and the result of the heavy sanctions imposed on Russia have forced Europe to look for alternative sources of energy. By the way, Azerbaijan has become one of the countries with energy resources that Europe is facing. This situation is also observed with the decrease of oil production in Russia. According to the reports, Russian companies, which produced about 44 million tons of oil and gas condensate in the last month, reduced production by 2% compared to August alone. In other words, Russia has reduced its oil production by 2 million barrels per day and stands in a negative indicator. Thus, interest in Russian energy is rapidly declining.
On the other hand, the closure of the 1,230 km "Northern Stream-2" pipeline, which has been built at the expense of Russia, is left unused, and then, as a result of various excuses of technical problems, the suspension of the "NS-1" pipeline also led to a paralysis of oil exports. Although Europe is extremely dependent on the Russian pipeline, which supplies 130 billion cubic meters of natural gas, the only hope left is the end of the war.
Human capital fleeing the country
Both military mobilization and the real situation in the country have started to displace local investors. The conflict and the concept of business, which are opposite to each other, stand face to face, bringing the internal possibilities to the limit. Currently, local investment together with its owners have started to flow to neighboring countries such as Turkiye, Kazakhstan, UAE and Azerbaijan. Indeed, war sometimes has its positive aspects as well as its negative aspects. Meanwhile, capital inflows from Russia have to some extent caused real estate prices and dynamics of some small and medium business sectors in both Turkiye and Azerbaijan. Even many large investors trying to escape the sanctions have now found a solution by basing in the center of Dubai. Because the UAE is one of the countries that both remain neutral against the Ukraine-Russia war and do not join the sanctions against Russia. According to the latest reports, the purchase of apartments in Dubai by Russian citizens was 67% in the first 3 months of 2022. Statistical information shows that more than 200,000 Russian citizens left for the UAE in the first 10 days of the war.
The merciless war took not only capital from Russia, but also hundreds of thousands of think-tanks and skills. Due to the situation in the country, neither a scientist nor an artist intends to live under the umbrella of the current government. It seems that soon even a bird will not want to fly in the sky of the country. Although the events are bitter, the war still takes a toll on both sides, reducing opportunities of all kinds. That is, on the one hand, the wealth of the country is running out, and on the other hand, other countries take those opportunities.
By Elnur Enveroglu