Russia Economy Thread

[ansy1968]

do you realize India is using Rupee with UAE. as long Arabs are in middle. Russia will have no problem using rupees.

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Especially when there are 3.5 million Indians working in UAE.

Indian expatriate community is the largest ethnic community in UAE constituting roughly 30 per cent of the country's population. The number of resident Indian Nationals is estimated to be 3.5 million in 2021 as per UAE records.

 

[quim]

Why is the rouble losing so much value recently?

The economy is recovering faster than expected, growing above 4.9% in the 2nd quarter. Consumption and demand has surged like the imports, so the ruble devalued amidst this and the rising interest rates in Europe and in USA.

But the Russian Central Bank has raised the interest rate to 12% yesterday to slow the demand for imports and stabilize the ruble. Now with
rising oil prices the revenues of the budget will surge again.

 

[Janiz]

The economy is recovering faster than expected, growing above 4.9% in the 2nd quarter.

Where did this growth come from and what's the inflation in Russia (yoy) right now?

Now with rising oil prices the revenues of the budget will surge again.

How much did they drop compared to 2021 or 2022? How much will it regain?

do you realize India is using Rupee with UAE. as long Arabs are in middle. Russia will have no problem using rupees.

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Since when this process started? And what about accumulated amounts that I've wrote about? It was Lavrov who said about that in Goa at the start of May. How long could this mechanism be functioning? A month and a half? I've read about some analysis from Severgaz Bank which said that even with using this way it will still generate at least 1 billion USD worth of rupees every month.

the ruble devalued amidst this and the rising interest rates in Europe and in USA.

The process of devaluation started recently. It's not like it's done. And among 30%+ inflation. How much a pair of shoes imported from China will cost in 6 months compared to yoy values? It looks like figures around 100% more don't look like a fantasy.

 

[blackjack21]

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The Russian auto industry set off in pursuit of Elon Musk, by Dmitry Skvortsov for VZGLYAD. 08.09.2023.

Acceptance of pre-orders for the first fully domestic passenger electric car has begun.

For the first time in many years, a pre-order for a passenger car completely created in our country, and even an electric one, has been opened in Russia. The electric car "Atom" is already called the Russian "Tesla", but analogies with the failed project "Yo-mobile" of billionaire Prokhorov also suggest themselves. What fate awaits the first primordially Russian modern car in the end?

The restructuring of the Russian automotive industry is taking place in several directions. Some manufacturers have established import substitution of Western-made components. Well, or at least they organized a parallel import of these components or their replacement with analogues made in China or Iran. In addition, Soviet car brands that have not yet been forgotten in Russia are being revived. True, in this case, as a rule, we are talking about putting copies of Chinese cars on the conveyor.

But most importantly, new cars of their own Russian design are beginning to be created. Among passenger cars, this is primarily the Atom electric car, the production of which is promised to begin in 2025. And although the first cars are still far from the assembly line, pre-orders have begun to be accepted on the company's website.

Pre-order examples

Acceptance of pre-orders is at least a controversial move, given the significant number of Russians who remember the widely publicized Yo-Mobile project, which also received pre-orders, and how that project ended.

Pre-orders for Yo-mobile were free. But the pre-order only guaranteed that customers would be notified of the possibility to issue a contract for the purchase of the Yo-mobile when it came to its mass production. In 2011, on the first day of operation of the Yo-Auto website, the number of applications submitted exceeded 50 thousand, and by the end of the first week it had crossed the mark of 100 thousand.

The obvious result of the pre-order campaign is an understanding of the structure of demand for different Yo-Mobile models: 84% of applications were for a crossover, 14% for a minivan, and 2% for a van. But since the closure of the project was announced in 2014, the benefit of this understanding turned out to be zero.

Perhaps the introduction of these pre-orders was Prokhorov's monkeying with Elon Musk with his Tesla. When Musk hosted the 2006 presentation of the prototype of The Roadster, he invited 350 VIPs and hyped media personalities to this presentation (even then-California governor Arnold Schwarzenegger was among the invitees). Guests were asked to take a checkbook with them so that after the test drive, if they liked the car, they could buy it.

Of course, not the prototype that was at the presentation, but the first cars from the assembly line (when it is launched) in an exclusive version with a special plate signed by the leaders of Tesla Motors: Martin Eberhard, Mark Tarpenning and Elon Musk. The price for exclusive cars was set at $100,000.

Respond to a public inquiry

Tesla Motors Elon Musk has become the personification of an alternative to Detroit as a symbol of the American traditional auto industry. By the time The Roadster was introduced, the days of the slogan "what's good for General Motors, it's good for America" were in the 1960s, when the products of the American auto industry, if not already, then at least seemed to be the height of perfection. By the middle of the 2000s, the American auto industry had already largely overcome the problems that it faced in the second half of the 20th century. But he got out, adopting the innovations of European and Japanese auto brands.

New items from BMW and Mercedes, Porsche and Lexus were still prestigious. The domestic auto industry did not cause Americans a sense of pride. At the same time, American IT companies demonstrated success - and it seemed that impressive prospects opened before them.

Elon Musk managed to turn Tesla Motors into a model of the same technological company and make it a promising alternative to the inert Detroit. Plus, the electric car has fallen into the trend of the fight against global warming that has already begun. Moreover, The Roadster allowed the Americans to maintain their commitment to a real car - with high comfort, high dynamic performance and sufficient range for American distances.

Now the mass attitude in Russia to environmental problems has changed somewhat. But not so much that an electric car manufacturer can build a successful marketing strategy on this. Atom, rather, can appeal to global trends. The share of sales of electric vehicles is growing worldwide. Therefore, for someone, the opportunity to transfer to the "transport of the future" can be an argument. But such sentiments will become massive if it becomes really convenient to use electric vehicles.

Who will create the infrastructure?

You can't pour electricity into a canister, you can't pour it out of the tank of another car. Therefore, a network of electrical charging stations is needed.

Elon Musk had to deal with this on his own. And in February 2023, Tesla Motors owned 17,711 charging stations (that is, about 60% of all car chargers in the US). The company also installed about 10,000 slower chargers near houses (so that the car can be charged overnight). The company plans for 2023 to install another 4,000 slow chargers near hotels and restaurants.

In Russia, at the time of the birth of the Yo-mobile, there were no chargers, and Mikhail Prokhorov, apparently, considered that it was too expensive to create them at his own expense. Therefore, the propulsion system of the Yo-mobile had to be made hybrid, which practically nullified the environmental motivation for purchasing this car.

Atom will enter the market in a completely different situation. There are already more than 220 charging stations in Moscow (which are used by about 7,000 car owners). There are 83 charging stations in St. Petersburg and 44 in Nizhny Novgorod.

In the Far East, the first charging stations appeared in 2019. Today, RusHydro, within the framework of the Silk Road project, provided 70% of the route between Moscow and Vladivostok with charging, installing 150 fast EZS in 32 regions. The distance between them is 100-150 km, which allows you to travel safely even on electric vehicles with not very high mileage. In the future, the company plans to increase the number of charging stations to 1,500 by 2035. Most million-plus cities have their own programs for the development of electric charging infrastructure.

Now EZS users are mainly owners of imported electric vehicles (12.4 thousand Nissan Leaf, 3.5 thousand Tesla, 940 Porsche Taycan, 865 Audi and 559 BMW). The number of owners of the Evolute electric car produced in Russia (the Russian version of the Chinese Dongfeng Aeolus E70 electric car assembled in Lipetsk) and the Moskvich 3e electric crossover coming off the assembly line of the Moskvich plant (Chinese JAC Sehol E40X adapted to Russian conditions) is growing.

Business model

Tesla Motors' business model was built more in the style of tech start-ups like Apple than the traditional American auto industry. Tesla Motors has seen impressive growth over the years, but never broke even until 2020. Nevertheless, all the years before Tesla Motors reached the break-even point, the faith of investors in the company's products allowed it to raise more and more money by expanding production, bringing new models to the market, and most importantly, creating a charging infrastructure.

Tesla Motors has gone through the classic path of American technology startups from crowdfunding, through the participation of venture capital funds, IPO and further growth of the shares of a public company. This was the most realistic way for the project, which is an ideological alternative to Detroit (which was also played by Elon Musk at one time).

It is pointless to talk about the Yo-mobile business model. In any case, if Mikhail Prokhorov understood the strategy used by Elon Musk, it was unrealizable in the then Russian conditions: in Russia, venture capital investment was several orders of magnitude less powerful. Therefore, the Yo-Mobile project was a primitive attempt to create a relatively fresh product from available imported cubes - in the hope that it would “come in” to buyers and be able to sell it in quantities sufficient to pay off the investment.

As for Atom, so far we can only make assumptions about its business model. In terms of hardware, the project is based on investments from state corporations (Rostec, Rosatom, Rosseti and their companies). The car will not form the market itself, but will enter it after the already mentioned Evolute, Moskvich 3e and imported models. And here it is important what impression it will make on buyers. Musk has amazed users with a novelty that has never been seen before. Atom will have to compete with models that have already won their fans.

https://twitter.com/i/web/status/1689956737812418560

 

[Stierlitz]

Amidst the ongoing Ukraine conflict, Russians experienced increased wealth last year, in stark contrast to the trillions of dollars lost by the US and Europe, according to UBS. - Newsweek

The Swiss bank's annual Global Wealth Report for 2022 revealed that Russia's total wealth grew by $600 billion. Additionally, the count of Russian millionaires surged by approximately 56,000, reaching 408,000, and the number of individuals with an ultra-high net worth (over $50 million) surged by nearly 4,500.

In stark contrast, the United States faced the largest wealth decline, losing $5.9 trillion. UBS reported that the combined wealth of North America and Europe decreased by a staggering $10.9 trillion during the same period.

@DDGeopolitics

 

[blackjack21]

Amidst the ongoing Ukraine conflict, Russians experienced increased wealth last year, in stark contrast to the trillions of dollars lost by the US and Europe, according to UBS. - Newsweek

The Swiss bank's annual Global Wealth Report for 2022 revealed that Russia's total wealth grew by $600 billion. Additionally, the count of Russian millionaires surged by approximately 56,000, reaching 408,000, and the number of individuals with an ultra-high net worth (over $50 million) surged by nearly 4,500.

In stark contrast, the United States faced the largest wealth decline, losing $5.9 trillion. UBS reported that the combined wealth of North America and Europe decreased by a staggering $10.9 trillion during the same period.

@DDGeopolitics

I guess sanctions work backwards in Russia.

 

[HighGround]

Where did this growth come from and what's the inflation in Russia (yoy) right now?

Military factories in Russia are doing triple shifts right now. Russia's issues aren't GDP growth really, its issues are in the structure of its economy. That said, the decoupling from the West is an opportunity for both sides of the world to fix some of the foundations of the economy.

It was never a smart idea to be so dependent on an energy supplier who is geopolitically and culturally so diametrically opposed to you, and vice versa. It was never smart for Russia to have so much of their economy tied to the West.

 

[pmc]

Military factories in Russia are doing triple shifts right now. Russia's issues aren't GDP growth really, its issues are in the structure of its economy. That said, the decoupling from the West is an opportunity for both sides of the world to fix some of the foundations of the economy.

It was never a smart idea to be so dependent on an energy supplier who is geopolitically and culturally so diametrically opposed to you, and vice versa. It was never smart for Russia to have so much of their economy tied to the West.

It took a decade for highly automated Korean auto factories to surpass Lada. and this was right decision to have Japanese and Korean in automobiles not just because of reliability but that free flow of parts from Mideast and that policy proved correct by the recent used car imports. and some things you have to leave on the table for those global traders as they can can help in many other things.
so i am not sure why you think the economy should have restructured in some other way because economy is not decouple from West except for some big ticket items which Russia want to replace anyway. its pilot training/maintenance are tested in post covid era both in Ukraine and Mideast connected to Africa in prolong conflict and these things are keenly observed. The investment in factories and every thing else associated with Ukraine conflict will flow through down south. so fundamental structure of economy is serving Russia interests.

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[Michael90]

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Military factories in Russia are doing triple shifts right now. Russia's issues aren't GDP growth really, its issues are in the structure of its economy. That said, the decoupling from the West is an opportunity for both sides of the world to fix some of the foundations of the economy.

It was never a smart idea to be so dependent on an energy supplier who is geopolitically and culturally so diametrically opposed to you, and vice versa. It was never smart for Russia to have so much of their economy tied to the West.

Agree 100% on this. I never understood why the European powers especially were ok depending so much on gas/oil supplies from Russia (especially Germany who was the main architect pushing for this). Russia is not an ally and never has been. Things were bound to one day turned sour one way or another, was just à matter of time. It was foolish for European powers not to see that coming. Lol

 

[tygyg1111]

Where did this growth come from and what's the inflation in Russia (yoy) right now?

How much did they drop compared to 2021 or 2022? How much will it regain?

Since when this process started? And what about accumulated amounts that I've wrote about? It was Lavrov who said about that in Goa at the start of May. How long could this mechanism be functioning? A month and a half? I've read about some analysis from Severgaz Bank which said that even with using this way it will still generate at least 1 billion USD worth of rupees every month.

The process of devaluation started recently. It's not like it's done. And among 30%+ inflation. How much a pair of shoes imported from China will cost in 6 months compared to yoy values? It looks like figures around 100% more don't look like a fantasy.

We must absolutely make Russian inflation look worse than western inflation