Page 56 - RusRPTAug22

The sectors that performed worst are those directly affected by sanctions and no sector is more exposed than the automotive sector where some 60% of the parts are imported, as a basic part of the foreign manufacturer’s business model, as bne IntelliNews reports in a feature on the collapse of AvtoVaz’s production.
Car production in June was down 89% in June y/y, although there was a tiny rebound over the previous month as carmakers started to find alternative sources for some of the missing imported parts. However, cars are now being manufactured without things like GPS or airbags, which were all imported and now unavailable. A total 13,400 cars were produced in June, against the mere 3,700 that were assembled in May. The sales of cars in May however, were better: 24,268 cars were sold, but that is down from the 100,000-150,000 that were typically sold each month before the war. (chart) Likewise, truck production was down by 40% y/y in June.
Other sectors exposed to sanctions did equally badly. Computers and semiconductors did particularly badly as inventories are exhausted and it is impossible to import replacements. Production halved month on month from 5.3mn pieces produced in May to 2.5mn pieces in June and was down 39.6% y/y.
And general manufacturing was down, as much driven by the fall in demand as the lack of inputs. Production of washing machines was down 58.4% y/y in June, fridge-freezers down 52.3% and cigarettes down 32.4%.
“As for manufacturing, it was another mixed performance under the surface. Production of machinery and electrical equipment picked up, but output of computers declined, and motor vehicles production was down by around 63% y/y,” Capital Economics reports.
56 RUSSIA Country Report October 2020 www.intellinews.com