Being good is bad for Ford in Russia

Ford is one of the most successful automakers in Russia. Its decision to open a plant in St. Petersburg in 2002 has helped the Focus become a top seller and made Ford a market leader.

So why should Ford be nervous about its future in Russia?

Because it is not Russian enough.

Preferential treatment

The Russian government is tired of seeing foreign brands come into the country and outsell the locals.

AvtoVAZ and GAZ don't have the models to compete with Ford, Renault, Volkswagen and Toyota.

So as the old saying goes, “If you can't beat them, join them.”

The Russian government strongly supports the bid by Magna International and its Russian partner, state-controlled lender Sberbank, to get control of Opel.

If General Motors agrees to the deal, Opel will become very Russian, very fast. It is certain to get preferential treatment once its technologies start filtering into models made by either GAZ or AvtoVAZ.

Then Russia will have the automaking credibility that Prime Minister Vladimir Putin so desparately seeks.

Pressure to give more

Putin is doing everything he can to keep Russia's domestic automakers from collapsing. That is why he recently put so much pressure on AvtoVAZ shareholder Renault SA, which has a 25 percent stake in the company, to increase its commitment to Russia's largest automaker.

As long as Renault keeps providing AvtoVAZ with either cash (unlikely) or intellectual property (likely) it will remain on Putin's “friends” list.

Ford doesn't have a partnership with either of Russia's struggling local brands. In a normal market during normal times, Ford would be jumping for joy because of this good fortune. But in these upside-down times, being bad is worth billions in financial support and being good is worth a lot less than it should be.

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