Russian ministry not easing rules for automobile assembly
MOSCOW. April 8 (Interfax) - The Russian Industry and Trade Ministry does not intend to ease the regulations for the industrial assembly of automobiles in the country.
"Positions on the terms for industrial assembly will not be relaxed. Indeed we are pursuing a policy intended to increase the degree of localization for automobile manufacturers, and not by increasing the number of screwdriver assembly projects but by enhancing quality and the depth of localization," Industry and Trade Minister Denis Manturov said in an interview with the Kommersant newspaper.
The original industrial assembly rules envisaged practically zero duty on components in exchange for commitments to produce at least 25,000 automobiles per year with up to 30% localization. New rules adopted in 2011 extended the concession on component imports by eight years, but stated that companies had to expand production to 300,000-350,000 automobiles per year four years after supplementary agreements took effect. They had to set up research and technical centers, install Russian-made engines and gearboxes in 30% of the vehicles produced and raise the degree of localization to 55%-60%.
The market for cars and LCVs declined for almost the whole of last year and fell 5% in 2013 as a whole to 2.78 million vehicles. The best case scenario this year is for production to be level with 2013, and the worst case is for it to fall by between 5% and 20%.