The New York Times published a long article earlier in the week on the auto industry in Russia. There are lots and lots of great points on the opportunities for the global car manufacturers to sell cars with such strange accessories as brakes, windscreen wipers that actually remove the muck from the windscreen and, vitally important when its -10 outside, heated car seats. The article is worth reading.
If the NY Times could explain to me its headline Oil Spreads Wealth in Russia, and Russians Are Spending It on Foreign Cars and the inherent link. Now if the article was about how the Ferrari dealership sold out on the day it opened, or the Bentley dealership just down the road from Lubyanka whose opulence actually intimidates me I might be a buyer. But lets examine who is buying Hyundai's, and Ford Focuses and Kia's and Skoda's. They generally don't work for, own or steal cash from oil companies (the obvious link). A tiny few work for companies that service oil companies, auditors, lawyers, and the army that is required to look after the BP expats-wives (known locally as BP Princesses). But to be honest they always earnt enough to not have to buy a Hyundai. The lucky few who feed off the cash that falls from the tables of the super-rich oil men in Moscow have not grown more numerous over the past few years. Nor are the oilmen of Siberia driving demand. Nor are the Government's overflowing coffers causing cars to be bought. The cash that Putin just spent on pensioners, teachers and doctors is not going to buy cars. It might change consumtion patterns towards higher value goods, but they will still be necessities, not niceties like cars.
A better headline should be "Growing economy Sees Greater Wealth Trickle Down." This is a boom driven by local consumption that spreads its wealth far more rapidly than oil will ever do. Oil creates corruption and the corrupt don't drive Hyundai's.
No comments:
Post a Comment