hat Happened to Investments in Consumer Sectors

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In the manufacturing industry, among industries focused to a greater extent on the consumer market, only automobile manufacturing (plus 65%) and beverage manufacturing (plus 47%) showed high investment growth. Food production demonstrated virtually zero investment growth, investments in textile manufacturing increased by 19%, and clothing by about 3%. According to economist Rodion Latypov, author of the Telegram channel "Hard Digits", the relatively low investment growth rates in the "consumer" sectors mean that "the need for import substitution in them was not expressed so clearly, including against the backdrop of the development of new import channels."

In both the production austria whatsapp number database of motor vehicles and the production of beverages, the growth in 2023 was preceded by a collapse in investments in 2022 - by more than 50% and almost 30%, respectively (according to Rosstat data for the full range of enterprises). Dmitry Babansky, Head of SBS Consulting projects, notes that the growth in investments in the production of motor vehicles may be associated with the technical re-equipment of enterprises in the industry after the departure of Western partners and the expansion of existing capacities. According to Avtostat, by the end of 2023, the share of Chinese cars in the Russian new car market exceeded 60% (in February 2022 it was less than 10%), and the share of domestic cars was 30%.

In the automotive industry, as in some other industries, investment growth can be called restorative, Latypov points out. Thus, in the production of motor vehicles, trailers and semi-trailers, investments in fixed capital in 2022 decreased by 53%, he recalls, therefore, "even growth of 65% in 2023 will not yet return them to 2022 levels." Partner of the group for servicing companies of the automotive industry of the DRT company Tatyana Kofanova. Tatyana Kofanova says that their clients show "the restart of some automotive production, including due to government support measures, "industrial mortgages" and many others." "In addition, new partnerships have been formed, mainly thanks to investors from China," she adds.

The beverage industry has undergone a global transformation over the past two years, recalls Maxim Novikov, President of the Union of Juice, Water and Beverage Producers (Soyuznapitki). The departure of the largest international brands from the Russian market has opened up new business opportunities for Russian producers, and many Russian companies have been able to significantly expand their presence in chain retail and increase sales, he points out. The expansion strategy required additional investments from companies, in particular, for rebranding, launching new products and additional business areas, and in some cases, for merging with other companies. "This process is not yet complete, and in the coming years the soft drink industry will have to balance itself, during which time both positive and negative dynamics of investment activity may be observed," Novikov adds.

"In the beverage industry, a unique situation has developed in terms of investment, when two of the largest brands, Coca-Cola and Pepsi, have left the Russian market and opportunities have been created for the development of local brands in a number of categories by Russian players," confirms Mikhail Burmistrov, CEO of INFOLine-Analytics. "The return on these investments will most likely be quite good, because new brands have managed to gain significant positions in the market, and in this regard, the soft drinks segment has made a fairly large contribution," says the expert.