Russians Love the Big Iron
By Brendan Moore
Up until a short time ago, I regularly used a car service that provided pick-up and drop-off at the airport that employed nothing but expatriate Russian nationals as their drivers. Since a couple of these guys had an interest in cars, and it was always a long drive to the airport, we would frequently talk about cars, and sometimes about their impressions of the car market in Russia.
They’ve been telling me for years about how much Russians love big cars and big SUVs, even though most Russians can’t afford such vehicles after paying the purchase price, the import duties, etc. Specific to American vehicles, they say that American cars and SUVs (and trucks) are well-thought of in Russia. I thought about those conversations today as I was reading a Reuters article about how Russians are increasingly turning away from domestic producers like Zhigulis and Volgas, and embracing foreign cars. According to Reuters, “Russians like their cars big, brash and foreign”. This, by the way, syncs up with what I’ve been hearing from the aforementioned Russians I know.
The article quotes a Russian driving a Land Rover, Yuri Golobayev, thusly: “Why am I driving this Land Rover? Because it’s comfortable,” said Yuri Golobayev, rubbing his hands along the dashboard to show his appreciation, as he idled in traffic near Red Square. “In the communist days, we didn’t have a choice, so my first car was a Moskvich, then a Kopeika,” he said, listing brands that were popular in the Soviet Union. Russians don’t trust their traditional carmakers, he said, if they can afford to buy a foreign make instead. “Yes, foreign cars are more expensive, but people just go to the bank and buy them on credit.”
GM and Ford are in the unenviable position of having to offer incentives on these types of vehicles in the U.S. in order to make them leave the lots here, and Russia appears to be an attractive market for some of that production excess. Meanwhile, both Ford and GM are laboring mightily to bring over some of their European-produced cars as soon as possible to meet new demand for smaller cars here in the States. If the Russians want Mustangs, F-150 pickup trucks, and Explorer SUVs, then, by all means, Ford should accommodate them. And Ford of Australia could use some foreign sales of its big, brash, RWD Falcon to shore up their general ledger as well. GM is in the same situation; just substitute Chevrolet Tahoe for Ford Explorer and Holden of Australia of Ford of Australia, and you can get the idea pretty quick.
I fully realize this is not as simple as throwing a switch, but, conversely, it is not a scenario that requires GM or Ford to move mountains in order to accomplish. Both companies already make the vehicles in question and both companies already have a considerable manufacturing and retail presence in the region.
Am I missing something here?
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