Business Commentary for Rational Individuals

Joint Ventures in Russia: Inchcape

Dr. Bill Belew

Issue IV - July 4, 2006

Introduction by Mr. Stolyarov: The Russian marketplace is steadily being strangled by corrupt bureaucracy, statist government, arbitrary laws, and authoritative caprices. Dr. Belew writes of an automotive retail group, Inchcape, which seeks to expand its operations into Moscow. We should wish Inchcape well in bringing a piece of the free market to a statist country controlled by whimsical, capricious, and arbitrary bureaucrats. Let us hope that Inchcape has the fortitude and resolve to resist attempts by the bureaucrats to control and expropriate it; knowing the Putin regime, these attempts are certainly forthcoming.

Russia is not quite the bear that the dragon of China is. But Russia still has appeal despite the many real obstacles and challenges a business partner might face.

The laws change seemingly on a whim; the government jumps in and out of relationships; work stops; a GM factory faced a temporary shutdown when it couldn't come to terms with a state-owned partner.

Still, there are a number of joint ventures in the news.

Despite the problems that GM has been having, the automotive retail group Inchcape hopes to team up with Moscow's automotive retailer Independence Group.

Inchcape has operations in Europe, Hong Kong, Singapore and Australia, so, why not Russia, too, they say.

Inchcape wants to sell and service Toyotas in Moscow. Toyota is one of Inchcape's global brand partners.

Inchcape will be majority owner and have one tire in Moscow's fast-growing garage.

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Dr. Bill Belew is a former Intelligence Officer for a Destroyer Squadron. He lived 20 years in Japan, where he started a language school for Japanese ECS. Dr. Belew teaches classes for a vocational school and online for a national university.

See Dr. Belew's blog, PanAsianBiz, for news and discussions about business and current events in Russia and Asia. See ZhongHuaRising for Dr. Belew's reports on business in China, RisingSunofNihon on business in Japan, and TheBizofKnowledge on business education.

Click here to view TRBJ's Issue IV Index.

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