The impact of geopolitical challenges on the development of the automotive market in the context of Industry 4.0

Chistyakov Il'ya Aleksandrovich Postgraduate student of the Department of World Economy at the Diplomatic Academy of the Ministry of Foreign Affairs of Russia; General Director of "Retel" LLC. 53/2c1 Ostozhenka str., Moscow, 119021, Russia iliaktb@inbox.ru

Introduction

In the context of global changes in the global economy and the technological environment, the automotive industry is becoming the sector of the economy most sensitive to the consequences of global crisis processes caused by geopolitical challenges. Modern research has largely focused on the destabilization of established global supply chains due to global conflicts (see the works of, for example, Yu.A. Ilyin ^[1], G.L. Brodetsky ^[2], A. Toigar ^[3]), as well as the trend towards deglobalization (which is perceived by some authors, for example, A.P. Portansky, as an objective reality rather than a man-made process, which is confirmed by the declining interest of many countries in participating in global economic forums ^{[4, p. 8]}), regionalization and fragmentation ^{[5, p. 1291]} of international economic relations. However, the question of how these changes affect the automotive industry, which is characterized by a high level of technological development and digitalization, remains poorly understood.

In scientific discourse, the topic of studying the impact of political crises on the Russian automotive industry is extremely relevant (see, for example, the works of D.M. Storchak ^[6], R.N. Mirzakhanov, K.V. Zhuravleva ^[7], N.V. Loban ^[8]) and different regions of the world ^[9], and the Industry 4.0 and its impact on the transformation of the automotive sector is also actively studied in the modern doctrine of the world economy (see, for example, the work of A.S., Afolalu et al. ^[10]). Russian researchers draw attention to the need to increase the independence of the domestic automotive industry, the introduction of digital technologies such as IoT, 3D printing and artificial intelligence, as well as the importance of creating sustainable regional alliances. Foreign research, in turn, focuses on the integration of Industry 4.0 technologies into supply chains, the development of autonomous vehicles and electric vehicles, the use of big data to manage production and reduce the carbon footprint in the automotive industry. However, not much attention is paid to the topic of the impact of geopolitical challenges specifically on the achievements of Industry 4.0 in the automotive sector, as well as possible ways to minimize the impact of political risks on the automotive industry through the active development and introduction of new technologies.

The relevance of our research topic is due to the fact that the impact of political processes on the automotive market requires a deeper analysis in the context of the use of advanced technologies in Industry 4.0, as well as the fact that the automotive market not only in Russia ^{[11, p. 139]}, but also around the world ^[12] has been experiencing serious structural changes in the last few years Against the background of global political changes, players, business fundamentals and products themselves are changing, and global sales markets are being redistributed.

The relevance of this topic is also closely related to the issues of national security of the Russian Federation. The automotive industry, as an essential component of industrial production, has a significant impact on the economic stability and technological independence of the state. In the context of global geopolitical challenges such as international sanctions, changing trade routes and increasing competition in world markets, maintaining the competitiveness of the domestic automotive market is becoming a strategic task.

However, we believe that despite the difficulties caused by the current geopolitical conflicts, such circumstances open up new development opportunities for various sectors of the economy. Digital transformation, in turn, not only creates additional tools for adapting to new challenges, but also enhances the sustainability and flexibility of economic processes. Thus, the above-mentioned factors, as well as the lack of relevant scientific research in the field of the influence of geopolitical factors on the development of Industry 4.0 in the automotive sector, led the author to choose the research topic.

The hypothesis of the study is that in conditions of geopolitical instability and the transition from globalization to regionalization, the key to the sustainable development of the automotive industry is the introduction and active use of Industry 4.0 tools, which minimizes dependence on external factors and contributes to the development of national markets.

The purpose of the study is to identify the key factors determining the transformation of the automotive industry in the context of geopolitical challenges and the introduction of Industry 4.0 technologies.

To achieve the goal, the following tasks are set:

- analyze the impact of political instability on supply chains in the automotive industry;

- explore the role of digital technologies in increasing the sustainability of the automotive sector;

- to assess the prospects of the Russian automotive industry in the face of sanctions pressure;

-develop recommendations for achieving technological sovereignty.

Key events in world politics and modern Russia

Since 2014, Russia's national economy and security have been the subject of a large number of unilateral restrictive measures initiated by "significant jurisdictions" - EU countries, as well as the USA, Canada, Switzerland ^{[13, p. 2434]} and many others. The introduction of several tens of thousands of sanctions against individual Russian individuals, including KAMAZ ^{[14, p. 377]}, AvtoVAZ, Sollers and Moskvich, could not but affect the overall picture of the automotive market in Russia (URL: https://www.kommersant.ru/doc/6212752 , (date of access: 04.01.2025)). The impact of sanctions requires finding ways to reduce risk, as well as new suppliers and partners abroad.

Recent global events, namely military conflicts with the direct or indirect participation of the United States, have significantly transformed the structure of the global economy, strengthening the relationship between political and market processes to an unprecedented level. One of the most important factors of the last decade has been the strategic economic rivalry between the world's largest economies — the United States and its partners, on the one hand, and developing countries on the other. This confrontation in modern scientific discourse is often interpreted as a confrontation between "Western countries" and the "global South." Conceptual approaches to the concept of the "global South" and its justification can be found in the works of such authors as P.P. Yakovlev ^[15] and K. Mikatekiso ^[16]. In their works, the authors emphasize that the structure of the world economy can objectively trace the formation of new, non-traditional business and economic centers, which are becoming smaller and smaller. they depend on the US economy.

The COVID-19 pandemic, which broke out in 2020 and was one of the largest political and economic upheavals of all mankind, not only led to a global economic downturn, but, on the contrary, accelerated the processes of digitalization, stimulating the transition to remote business and work formats. This, in turn, has made technologies for processing large amounts of data and online monitoring of production processes extremely relevant. In general, we should agree with the opinion of D.A. Ivashchenko, who noted that the COVID-19 pandemic and its socio-political consequences were one of the key factors of widespread digitalization in developed countries and large economies ^{[17, P. 259]}, and in general, OECD researchers come to similar conclusions in their report "The growth outlook of the ICT Sector" ^{[18, p. 16]} (see the table), as they rightly noted that in the first year of the pandemic (2020), the digital economy showed growth, against the background of a decrease in the growth of the overall economy.

Table 1 - Change in economic growth rates from 2018 to 2023

Source: compiled by the author based on the materials of the website: https://www.oecd.org/en/publications/2024/05/oecd-digital-economy-outlook-2024-volume-1_d30a04c9.html

The sanctions pressure on Russia in the context of the events in Ukraine has exacerbated structural changes in global trade flows and supply chains, affecting both the Eurasian region and the global economy as a whole. The imbalance in global supply chains has affected the structural changes in the global automotive market. According to forecasts presented in the World Bank Group's Economic Development Prospects report for 2024-2025, the growth rate of the global economy, as well as individual countries, will be significantly lower compared to the same period in the 2010s (URL: https://thedocs.worldbank.org/en/doc/f43fb9163f5e4704740c30b614a9ad59-0050012024/related/GEP-June-2024-Chapter-1-Highlights.pdf (date of access: 04.01.2025)), and according to the forecast of the expert agency "Autostat" new car sales will fall by 10% (according to the most pessimistic forecasts – by 20%) by the end of 2025, which is also caused by structural changes in the global economy (URL: https://www.rbc.ru/business/09/12/2024/6756a3fd9a794754133e2900 (date of request: 04.01.2025)).

In modern conditions, states are increasingly focusing on the development of national markets and deepening cooperation with their closest partners, which may be linked not only by territorial proximity, but also by similar political interests, one of which is the formation of a technological counterweight to the most developed countries. A striking example of such interaction is the BRICS platform, whose importance has increased dramatically in the period 2022-2024. The members of the association actively cooperate in various fields, from economics and politics to culture, including joint projects in the automotive industry.

An analysis of the Kazan Declaration of the BRICS member countries in 2024 allows us to conclude that the participants of the political association are aimed at economic cooperation with each other, for which a number of special projects in the industrial sector are envisaged (URL: https://brics-expert.info/documents/dokumenty-esvu-briks/kazanskaya-deklaratsiya-briks-23-oktyabrya-2024-goda / (date of request: 04.01.2025)):

1) Special Economic Zones (SEZ): Creation of a Forum for cooperation in the field of special economic zones of the BRICS countries (paragraph 74 of the declaration). This mechanism promotes the development of high-tech industries, including information technology, the development and commercialization of new technologies. It is aimed at stimulating investments in priority areas of economic development.

2) Support for small and medium-sized enterprises (SMEs): Strengthening supply chains and creating new cooperative relationships for SMEs using high technologies and innovations (paragraph 75 of the declaration). This makes it possible to integrate small businesses into the processes of Industry 4.0 through digitalization and productivity improvement.

3) Partnership for the New Industrial Revolution (Partner): Creation of the BRICS Industrial Competence Center in cooperation with UNIDO and holding events such as the PartNER Forum, the Industrial Innovation Competition and the Exhibition on the New Industrial Revolution (paragraph 76 of the declaration). These actions contribute to the development of skills and partnerships in the fields of digital transformation, intelligent manufacturing and robotics.

4) Development of digital infrastructure and artificial intelligence: Cooperation in the field of the digital economy, including the development of 5G technologies, artificial intelligence and satellite systems (paragraph 77 of the declaration). These measures are aimed at strengthening digital connectivity, supporting inclusivity and bridging the digital divide.

The current vector of development of the economic policy of the Russian Federation is based on strengthening and deepening partnership with the CIS, SCO and BRICS countries (paragraph 2, paragraph 21 of Section III of the Economic Security Strategy of the Russian Federation for the Period up to 2030) (URL: https://www.garant.ru/products/ipo/prime/doc/71572608 / (date of access: 04.01.2025)) , and the modern concept of foreign policy The Russian Federation encourages initiatives aimed at regional and interregional cooperation within these associations (URL: https://www.mid.ru/ru/detail-material-page/1860586 / (date of access: 04.01.2025)). All these changes are the result of recent political events that have clearly demonstrated the failure of the global economy, built or, one might even say, "globalized" around a single center – the US economy.

The impact of global politics on the global economy and the global automotive sector

The relationship between geopolitics and economic processes has been explored by numerous domestic and foreign authors. Thus, B.I. Shevchenko ^[19] identified the main properties of the modern paradigm of the influence of world politics on the economy in the context of globalization, identifying six such:

1) The system-forming importance of the economy, which is becoming a key factor in international relations;

2) The emergence of new mechanisms of interaction, including multinational corporations and international economic organizations;

3) Internationalization of financial capital, accelerating global investment flows;

4) The role of the energy factor determining access to resources as a key component of international policy;

5) Increased globalization (integration), forming a new order of interaction between the Center and the Periphery;

6) Integration of politics and economics, where each sphere influences the other, becoming a tool for achieving national and global goals.

Regionalization, as a process different from globalization, in our opinion, still has all the same properties, with one key difference – the vector of regionalization is aimed at autonomization and increasing the level of self-sufficiency of individual regions. It is not for nothing that in the doctrine of the world economy, the processes of regionalization and globalization, among others, are perceived not as antagonistic, but as complementary processes ^[20].

In any case, none of the economic sectors, including the automotive industry, is immune from the risks associated with political cataclysms in international relations, since global supply chains are interconnected and concentrated around the largest economies in the world. The influence of world politics on the automotive industry is an important component of the study within the framework of the doctrine of the world economy. A.V. Pasko ^{[21, p. 60]} in his research on the features of the globalization of the automotive industry comes to the conclusion that when organizing production abroad, automobile concerns should take into account primarily "global factors". Among them, the author highlights international political conflicts, the internal instability of the countries of production and the social characteristics of the regions.

We consider it fair to say that political factors are of primary importance when setting up enterprises abroad, which has been the case for the automotive industry in recent decades (and has been in relation to Russia). an urgent trend that allows minimizing primarily logistical costs ^{[22, P. 2]}, as well as, among other things, choosing a more favorable tax jurisdiction. In our opinion, the priority of taking into account the domestic and foreign political situation when choosing a foreign jurisdiction is due to the fact that the country's political stability directly affects the long-term prospects for successful investments, including aspects such as property protection, compliance with legal norms and the sustainability of supply chains.

In addition, when analyzing the investment climate of any country, the political situation always comes to the fore. It is associated with the most significant risks, such as the likelihood of changes in legislation, the initiation of a military conflict, the imposition of sanctions or other restrictive measures (for example, restrictions on exports and imports), which significantly affects the activities of multinational companies. In this context, consideration of political factors becomes a fundamental element in making strategic decisions in the automotive industry.

Entrepreneurs and experts J. Sell, R. Davis, and S. Love emphasize in their research how global policy decisions have a direct impact on the automotive sector (URL: https://flint-global.com/blog/the-auto-sector-in-2024-the-political-choices-that-lie-ahead / (date of access: 04.01.2025)). One striking example concerns the United States, where legal requirements related to supply chains and sanctions restrictions are becoming significant barriers to market entry. The recent Volkswagen case highlighted by the authors demonstrates this problem.: Thousands of the company's cars were confiscated after she herself reported that one of the components could have been produced by a company on the OFAC SDN list.

Considering the impact of sanctions specifically on the Russian automotive sector in the context of the development of high technologies and the impact of Industry 4.0, we can conclude that domestic production is undergoing negative changes. The Russian automotive industry is faced with the withdrawal of business by large automakers from the territory of Russia, which, in turn, is the reason for the restriction of consumer demand, the narrowing of the market, disruption of technological exchange with companies from foreign countries, falling export and import volumes, and the destruction of established value chains. The most striking example of the negative impact of the withdrawal of foreign companies from the Russian market is the sale of shares of KAMAZ and the exit from business of the German company Daimler Trucks, which, from our point of view, disrupts any, including potential, technological exchange between domestic and European truck manufacturers. In general, this situation is a demonstration of the fact that none of the possible solutions to Industry 4.0 in the automotive industry is currently fully localized in Russia, and this problem is still the subject of discussion and search for solutions.

EU sanctions, including restrictions imposed by Council Regulation No. 833/2014 and its amendments, have banned the export of certain goods and technologies to Russia, such as cars with engines of more than 1.9 liters, electric vehicles, hybrids and key automotive components. This has created serious obstacles to the production and maintenance of cars in the country. The departure of major automakers such as BMW, Volkswagen and others has deprived the Russian market of access to advanced technologies and equipment. With their departure, a niche was freed up, which was quickly occupied by Chinese manufacturers, strengthening their positions, however, their interest is focused on exporting goods to Russia, but not on creating full–fledged enterprises, and as an indirect consequence, technology exchange.

In addition, a number of Russian automakers and their executives have been sanctioned, which has limited access to investment and international cooperation due to reputational risks and overcompensation. These measures have significantly affected the structure of the Russian automotive sector, accelerating its transformation and the redistribution of market shares in favor of individuals and enterprises that are not subject to unilateral restrictive measures.

Sanctions pose a serious threat to Russia's national security, as they hinder access to technology, investment, and critical components. This has had a particularly strong impact on the automotive industry, as restrictions on the supply of equipment and automotive components have disrupted supply chains and slowed production. The ban on the export of cars and key parts, imposed as part of European sanctions, has increased pressure on the industry. The problem of the existence of "difficulties in the supply of significant components and materials" is noted, among other things, in article 2 of section "I". "Strategies for the development of the automotive industry of the Russian Federation until 2035”, and the strategy itself perceives the sanctions pressure on the Russian automotive industry as one of the most important problematic issues in the field.

In the face of sanctions challenges, domestic automakers are working to replace imported automotive components, selecting new suppliers, establishing cooperation with Asian partners, and implementing import substitution projects. Thus, AVTOVAZ JSC and UAZ LLC turned to the Chinese companies Trinova and APG to ensure the supply of the ABS system. In addition, Sollers PJSC has established the production of Chinese JAC vans under its own brand, and Avtotor JSC is repurposing its conveyors to launch new models. JSC "MAZ"Moskvich resumes production of cars under the Moskvich brand, while using the platforms of Chinese automakers such as JAC, FAW and BYD ^{[23, p. 36]}. However, financing projects has become increasingly difficult since the beginning of 2024, when almost all major Chinese banks suspended accepting payments from Russia due to political pressure from the United States.

These developments highlight that the very possibility of political decisions such as sanctions poses significant risks for car manufacturers, especially in the context of the growing interdependence of international supply chains. It is becoming vital for companies to identify and understand the political, trade, and regulatory risks associated with both manufacturing and using foreign components.

To summarize, modern geopolitical challenges significantly affect the automotive industry. Among the key challenges and risks are:

• Disruption of supply chains due to sanctions and conflicts, disruption of established partnerships.
• Increasing the role of local production and development, fully centered on the territory of one state.
• Active use and enhancement of the role of Industry 4.0 technologies to adapt to new conditions.
• Cybersecurity risks are high, especially in countries with underdeveloped digital infrastructure, which can lead to data leaks and disruptions in production processes.
• Political and economic uncertainty complicates long-term planning and investment in the automotive industry, especially in the context of sanctions pressure and unstable international relations.

Industry 4.0 and the automotive market: global and domestic experience

The introduction of Industry 4.0 tools into the global automotive market is an objective reality applicable to any carmaker: not only the production methods are being transformed, but also the product itself and the consumer experience.

A key element of this transformation is the use of 3D printing technologies that reduce waste, make more efficient use of materials, and reduce environmental harm. The automotive 3D printing market is projected to grow by 24.6% by 2026, reaching $3.9 billion, with a total market volume of about $30 billion (URL: https://www.acumenresearchandconsulting.com/3 d-printing-market (accessed: 04.01.2025)). In addition, the case of the Chinese company Hefei demonstrated the possibility of manufacturing cars entirely using 3D printers, as evidenced by the test runs of 50 "printed" cars in Shanghai in 2022 (URL: https://www.xevcars.it/en/news/xev-yoyo-at-the-100-edition-of-brussels-motor-show (date of request: 04.01.2025)).

Digitalization covers not only production, but also quality management. For example, BMW Group has implemented algorithms to analyze data from more than 3,200 assembly systems, which provides accurate feedback on the quality of connections and reduces manufacturing defects (URL: https://knaufautomotive.com/ru/revolyutsiya-v-3d-tekhnologiyakh-v-avtomobilnoy-promyshlennosti / (date of access: 04.01.2025)). Since 2019, KAMAZ has been actively implementing digitalization strategies in Russia, including the introduction of MES systems, digital production process management platforms, augmented reality and additive technologies, which has had a positive impact on production efficiency (URL: https://kamaz.ru/investors-and-shareholders/information-disclosure/annual-report / (date of access: 04.01.2025)).

Digitalization has also changed the approach to sales and interaction with consumers. Online car sales are becoming increasingly popular, as evidenced by the successful LADA online sales program launched by AvtoVAZ in 2023, which increased purchase conversions fourfold (URL: https://www.autostat.ru/news/56018 / (date of access: 04.01.2025)).

The Russian government is aware of the strategic importance of digitalization of the automotive industry. Section V "Global technological trends in the automotive industry" of the Strategy for the Development of the Automotive Industry of the Russian Federation until 2035 notes the need to introduce electrification technologies, hydrogen and gas engines, as well as the development of autonomous driving systems (URL: https://www.garant.ru/products/ipo/prime/doc/405963861 / (date of access: 04.01.2025)). The strategy provides for support measures, including subsidies, tax incentives and the creation of charging infrastructure, which is the basis for the modernization of the domestic automotive industry. The development of alternative energy sources and autonomous technologies will also be key to the global competitiveness of the Russian automotive industry.

Consequently, Industry 4.0 has a significant impact on the transformation of the automotive industry worldwide, but the degree of its implementation and development varies significantly from country to country. Russia, China and India, as key players in the modern global economy and countries aimed at maintaining technological competition and strengthening their automotive markets, demonstrate different approaches to the digitalization of the automotive sector. At the present stage, Russia is still characterized by limited resources and dependence on imports, which slows down the process of introducing new technologies ^{[24, p. 75]}. China, on the contrary, is actively investing in the development of digital infrastructure and localization of the full production cycle, which strengthens its position as one of the world leaders in the automotive industry, not only in terms of the number of cars produced, but also in terms of the level of implementation of the latest technologies. India, as a country on the periphery of the BRICS and the Eurasian Partnership, is at an intermediate stage, focusing on government support and the development of local suppliers, but faces limited financial resources and high risks in the field of cybersecurity. These differences lead to heterogeneity in the level of integration of Industry 4.0 technologies and the pace of digital transformation, which requires a comparison of key parameters of industry development in these countries (see table 2).

Table 2 - Comparative analysis of Industry 4.0 implementation

Source: compiled by the author based on the research materials ^[7],[8],[24].

The key problem with the introduction of Industry 4.0 technologies in the automotive industry, therefore, is the uneven development of digitalization and localization of production between countries, especially in the context of existing cybersecurity risks, which creates a gap in technological capabilities and reduces the effectiveness of global interaction. The solution to this problem may be the intensification of mutually beneficial technology exchange within the framework of integration associations such as BRICS and SCO and within the framework of bilateral cooperation. The political and economic cooperation between Russia, China and India, based on the existing principles of strategic partnership, makes it possible to strengthen the technological base, accelerate the transformation of the automotive industry on a global scale and ensure a more even development of the automotive industry in the face of global instability. The cooperation of car manufacturers within the framework of BRICS has high potential and is already in the phase of active discussions (URL: https://tvbrics.com/news/avtomobilestroenie-v-stranakh-brics / (date of access: 19.01.2025)).

Political and economic competition and digitalization as a risk reduction tool

Industry 4.0, based on digitalization, artificial intelligence and Internet of Things technologies, demonstrates both deceleration and growth in the context of global conflicts. On the one hand, technological competition increases tensions between countries, but on the other, it becomes a platform for international cooperation. For example, joint projects in the field of autonomous transport and electric vehicles contribute to the formation of new principles of interaction between regions, as can be seen in the example of BRICS technological cooperation projects proposed at the Kazan forum in 2024.

The United States continues to be one of the key players in the global automotive industry, having a significant impact on the global economy due to its large-scale market and high rates of technological innovation. Despite many economic and political challenges, the American economy is showing steady growth, as evidenced by the total value of securities on the stock markets, which reached a record $64 trillion by the end of 2024, exceeding the total global value by $2 trillion (see figure). This indicator highlights the importance of the automotive industry as one of the strategic and innovatively active areas of the U.S. economy.

Figure 1 - Capitalization of the securities market of the USA and the world.

Source: https://scottgrannis.blogspot.com/

However, new players are gaining ground on the world stage, which are creating competition for traditional leaders. China, as mentioned above, has significantly strengthened its position in the automotive industry. Since 2022, exports of Chinese automotive products to Russia have increased 5-6 times, and Chinese car brands have become the most popular not only in Russia, displacing European, American and Japanese manufacturers, but also worldwide (URL: https://www.rbc.ru/business/09/01/2024/659d75fe9a79474013077a45 (date of request: 04.01.2025)). These changes are largely due to geopolitical events that contribute to the expansion of China's influence in the Eurasian region and the global economy. 32.3%, or the majority, of new cars in 2024 were produced in China (URL: https://www.profinance.ru/news/2024/12/28/cemv-kazhdyj-tretij-avtomobil-v-mire-proizvoditsya-v-kitae.html (date of request: 04.01.2025)).

Technological competition stimulates the development of the industry. For example, 15 million electric vehicles were registered in the United States by the end of 2024, and 12 million in China. At the same time, both countries are actively investing in research and development (R&D), creating favorable conditions for innovation. For example, China's investments in automotive startups amounted to $25 billion, and the United States — $30 billion over the past year. Thus, political confrontation stimulates technological progress.

In the context of actual disparity and competition in the global economy, the tools of Industry 4.0 are an important mechanism for maintaining balance and minimizing risks in the automotive industry. Digitalization is an important tool for reducing political risks, influencing various aspects of international economic activity. One of the key areas of its application is to ensure the sustainability of supply chains. Technologies such as artificial intelligence, 3D printing, the Internet of Things, and blockchain make it possible to optimize logistics processes by ensuring transparency of all stages of supply. This not only minimizes the impact of political instability, but also provides companies with the ability to respond quickly to disruptions caused by sanctions or geopolitical conflicts.

In addition, digitalization helps to strengthen the flexibility of management, allowing companies to minimize dependence on local conditions. The introduction of cloud technologies and remote control platforms makes it possible for enterprises to continue operating even under political constraints. Automation and reducing the need for local staff reduce the vulnerability of companies to changes in the legal or social systems of the countries where they operate. In turn, the introduction of technologies for analyzing large amounts of data will inevitably contribute to the stabilization of global supply chains, which means that it will make the industry less susceptible to external factors ^{[25, p. 1195]}.

The use of big data analysis technologies and artificial intelligence systems opens up opportunities for more accurate forecasting of the political situation in a particular region when deciding on the localization of production. Such systems allow us to model potential scenarios, identify signs of growing conflicts, and develop strategies to prevent them. In this way, car companies can better prepare for the changes and minimize possible losses.

Digitalization also makes it possible to strengthen local production, which reduces dependence on external supplies. Modern flexible production systems and technologies, such as 3D printing, make it possible to quickly adapt production to changes in the political or economic environment in the event that supplies of necessary parts and tools are cut off. From our point of view, this helps to diversify risks and increase business sustainability, even against the background of potential interstate conflicts.

Cybersecurity is another important aspect of digitalization in the context of political risks. Modern information security systems help companies to resist cyber attacks that may be related to political instability or aimed at sabotage by unfriendly states.

Digital technologies also play a key role in financial risk management. Automation of financial reporting and asset management allow companies to reallocate resources faster in times of crisis, which helps to maintain sustainability even in adverse political conditions. In addition, digitalization opens up new opportunities for market diversification. The use of online platforms and digital marketing channels allows companies to reduce their dependence on traditional markets affected by political restrictions and effectively expand their presence in new territories.

Thus, digitalization is a powerful tool that not only helps companies adapt to changes in the modern market economy, but also the political environment, allowing them to minimize the risks associated with global and local political factors. Its application helps to increase the stability, flexibility and efficiency of business in the face of increasing geopolitical instability, and therefore the use of Industry 4.0 tools in the automotive industry is not just desirable, but rather mandatory if the company is trying to stay in today's changing world. In this regard, the Russian authorities need to pay more attention to subsidizing new technologies, independent of imports from unfriendly states, which will help stabilize the automotive industry.

Conclusions

Based on the analysis, we come to the following conclusions:

First, in order to minimize the impact of global political cataclysms and individual sanctions on the high-tech development of the national automotive industry, states need to focus on the development of Industry 4.0 technologies in the automotive sector in their domestic markets. The modern world, which is in transition from globalization to regionalization, inevitably faces political instability, which complicates the functioning of global supply chains and increases the risks for international cooperation. In such conditions, improving the manufacturability of production becomes not only an important task, but also a strategic necessity. Investments in production automation, artificial intelligence, the Internet of Things and 3D printing will reduce dependence on foreign suppliers of automotive components and equipment, ensuring the sustainability of supply chains. This will not only enhance the competitiveness of the Russian automotive industry, but will also be an important step towards achieving national technological sovereignty.

Secondly, it is necessary to form stable regional economic ties and platforms for technological exchange with friendly countries. Regional alliances can become the basis for joint research projects, technology exchange, and localization of automotive component production. This will strengthen economic stability, diversify exports and imports, and make more efficient use of domestic resources. At the same time, cooperation between car manufacturers within the framework of BRICS is already being actively discussed, and the successful implementation of such projects can make a significant contribution to the development of not only the Russian, but also the global automotive market.

Thirdly, an important area is the development of government support programs for domestic manufacturers and developers. Tax incentives, grants for research and development, as well as subsidies for automakers, especially for start-ups, potentially increasing the manufacturability of the Russian automotive industry and reducing dependence on foreign supplies, will create incentives for Russian companies to actively participate in innovative projects, especially in the face of the departure of foreign players. It is also important to introduce training and retraining programs to provide the industry with qualified specialists capable of working with modern technologies. Particular attention should be paid to improving cybersecurity, given the high risks inherent in the Russian and Indian automotive industries in comparison with the Chinese experience of actively protecting digital infrastructure.

Fourth, it is important to competently and consistently build cooperation with Chinese automakers, whose dominance is an objective factor not only in Russia, but also around the world. It is important to shift the focus from sales and revenue to technology exchange in order to increase the competitiveness of the Russian automotive sector as such. The localization of Chinese car production in the Russian Federation is seen as a priority in this regard. It is also worth considering China's successful experience in developing a full production cycle, which can become a guideline for Russia in its quest for technological sovereignty and minimizing dependence on imports. It is also worth keeping in focus the opportunities and prospects for cooperation between the member countries of the BRICS political association. Deepening the dialogue between states within the framework of this format can ensure the development of joint projects in the automotive industry, including the creation of integration platforms for technology exchange, the development of joint digitalization standards and the formation of regional supply chains. Such cooperation can become the basis for mutually beneficial technological exchange and increase the resilience of the automotive industry to global economic and political challenges.

Fifth, in order to minimize political and economic risks in the automotive industry, it is advisable to apply an integrated approach that includes several key areas. 1) Develop supply chain diversification by creating alternative logistics routes, strategic component stocks, and regional hubs for operational resource reallocation. 2) Invest in cybersecurity, including the implementation of multi-level data protection systems, the use of blockchain technologies and regular audits of the IT infrastructure. 3) Strengthen local production through flexible production systems and technologies such as 3D printing, which will reduce dependence on external supplies. 4) To step up the creation of regional alliances, especially within the framework of BRICS and SCO, in order to ensure technology exchange, localization of automotive components production and minimize the impact of sanctions pressure. 5) Provide government support for innovation, including subsidizing start-ups, tax incentives, and import substitution programs to encourage the development of independent technological solutions. 6) Use analytical tools based on artificial intelligence to effectively predict political risks, monitor the global situation, and develop preventive response measures.

Thus, it seems that the study complements the existing scientific discourse, focusing on the role of integration cooperation within the BRICS and SCO as a tool to bridge the technological gap in the automotive industry, as well as highlighting the importance of cybersecurity in the context of uneven adoption of Industry 4.0 technologies in different countries, which previously had not received sufficient coverage in scientific papers.