The Russian government is developing another campaign to support the national car industry to put competitive pressure on foreign made cars, especially used foreign-made cars. Prime Minister Vladimir Putin approved the introduction of prohibitive import tariff rates for cars made more than five years ago. In addition, the insurance cost and the tax for old cars will be raised too, the Vedomosti newspaper wrote.
Putin has recently held a special meeting devoted to the future of the Russian car industry. Putin said that the car industry provides three percent of the nation’s GDP and millions of jobs for Russian citizens. There were three million cars sold in Russia last year, although most of them were foreign-made cars, whereas traditional Russian car brands made up only a quarter of that amount. “This is all because the Russian car industry has receded from its position quite seriously,” the prime minister said.
International automobile corporations improved the situation on the home market. Russian-made cars made up about 40 percent of the market (including foreign brands), but it does not seem to be enough for Putin. “About 80 percent of cars sold in Russia should be made in our country,” the prime minister said.
The current prohibitive import tariff is applied to the cars made seven years ago or more. New rules will supposedly change the time limit to five years.
About 380,000 used foreign-made cars (14 percent of the market) were imported in Russia in 2007. A rise in of import tariffs rates will automatically increase the demand on new cars. However, Russian car manufacturers may not derive profit from it at all.
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