Former Mercedes CEO, Eckhard Cordes, is stressing the need not to rupture relations between Russia and the West as fallout from the Ukrainian situation continues its economic and political implications.
Addressing delegates at the recent St Petersburg International Economic Forum (SPIEF), Cordes, now chairman of the Committee on Eastern European Economic Relations, noted it was “not an option to get divorced” as the Russian economy feels the pain of high interest rates and capital flight.
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“[German Chancellor Anglea] Merkel [‘s] statement said…there is no alternative to restart close economic and political relations made [for] a long time between Germany, Russia and Western Europe,” Cordes told just-auto on the sidelines of SPIEF.
“It is not an option to get divorced.”
Cordes highlighted the burgeoning automotive sector in Russia, that up until recently, had been delivering impressive results as part of the emerging economies of the BRIC region and in particular the supply base.
“There are quite promising projects – Volkswagen is increasing in the Kaluga region [for example],” he said. “To build up production locally, a competitive supplier base is needed. That supplier base has not been developed sufficiently.
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By GlobalData“[Local content Decree] 166…it needs to be discussed to what extent [it is] still needed in years to come.”
Earlier, Cordes, who spent 30 years in the automotive sector, emphasised the importance of that supplier base, the absence of which would make “investment difficult.”
Cordes also warned disputes regarding Ukraine coupled with the danger of sanctions by the US and European Union, were weighing heavily on business.
“German business leaders have spoken out against economic sanctions as a political tool,” he said. “Even if this results in considerable public pressure on us.
“We are convinced mutual investment and mutual trade are confidence building measures. We would be more than happy to see Russian investment in Germany.
“German business has that confidence in Russia and has invested widely – EUR22bn (US$30bn) has already been invested and the potential from our point of view is enormous. German industry is prepared to further modernise the country.”
