27 May 2004 08:41
REJECTING 35% FOREIGN CAR DUTY REDUCES RUSSIAN AUTO INDUSTRY
ATTRACTIVENESS
MOSCOW. May 27 (Interfax) - The government rejecting the idea of a 35% import duty on new foreign-made vehicles will
reduce the investment attractiveness of Russia's automotive industry, president of Russia's automotive
producers association OAR Yevgeny Levichev has told Interfax.
This will cause Russian automakers to lose out on foreign
investments comparable to investment to that being put into the
Economic Development and Trade Minister German Gref had announced on Thursday that "I am definitely not planning
this," regarding the government's rejection of the import duty.
automotive industries of other countries such as China ($20 billion), Levichev argued. If the customs duty is less
than 35%, it is more advantageous to import finished automobiles into Russia than to set up production in the country,
he argued.
The current customs rate for new foreign-made vehicles imported by legal entities is 25% of customs value.
"There is experience in many countries that have set about developing their automotive industries, and
successfully regulated this process with high customs duties on the importation of automobiles," he said. South
Korea, Brazil and China have gone that route, and India is now, he added.
If the duties are raised to 35%, that would lead to an intensification of foreign companies setting up production in
Russia either independently or together with Russian producers, Levichev said. They would be followed by many companies
that make parts and components for automobiles, which the industry in Russia is in great need of, he said.
OAR was founded by AvtoVaz, Kamaz, Severstal Avto and Ruspromavto. Zil, Avtotor, the joint venture GM-AvtoVaz and a
number of enterprises producing automotive components are all part of the union.
[Interfax] |
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