| The government does not like the current car import regime The government has decided to accelerate the equalization of conditions for the import of cars with a service life of 3-7 years for individuals and legal entities, the need for which Russian industrialists have been talking about over the past year. The current order “depreciates the government’s steps to change customs tariff rates and discriminates against the “white import” channel,” Deputy Head of the Ministry of Economic Development and Trade Andrei Kushnirenko said yesterday at the annual business conference of the Adam Smith Institute on the development of the Russian automobile industry. Of the 629 thousand cars imported into Russia in 2002, legal entities, for which the duty is significantly higher, imported only 138 thousand. The Ministry of Economic Development and Trade, the Ministry of Industry, the Ministry of Finance and the State Customs Committee have already presented their proposals for equalizing duties. So far, however, they differ on specific rates levels. It is expected that the government commission on protective measures in foreign trade will consider the proposals made at the beginning of April and decide to “pull up” the level of rates for individual importers to payments by legal entities.
Officials also paint rosy prospects for the automotive components industry, the development of which the government has apparently decided to take seriously. Yesterday, at a meeting of the board of the Russian Union of Commodity Producers, the head of the mechanical engineering department of the Ministry of Industry and Science, Nikolai Sorokin, said that “the government is not satisfied with the scale and pace of investment in the automotive industry from foreign companies, and therefore it has been decided to take incentive measures.” As such, the Ministry of Industry proposes to raise import duties on car assembly kits of an increased degree of readiness to the level of duties on finished cars. At the same time, the concept for the development of the automobile industry adopted last year by the Cabinet of Ministers assumes that import duties on components are maintained at the current level for a 5- to 7-year stabilization period. Andrei Kushnirenko also confirmed the possibility of such an adjustment to businessmen. According to him, “the government is now discussing at the level of ideas an increase in the existing level of duties on highly assembled components” while simultaneously reducing rates on simple components. The government believes that these measures will force screwdrivers to produce components in Russia.
Another driver of development, according to the Ministry of Industry, will be the creation of production of components “in special economic zones, free from most taxes and other state-imposed burdens,” and providing domestic auto assemblers with attractive conditions for organizing production in remote territories, including the Far East. , in Primorye and the Kaliningrad region. True, in order to take this “step forward,” the Ministry of Industry proposes to first take “two steps back”: since not all components are produced in sufficient quantities in Russia, for a certain period, in order to saturate the market, it is proposed to minimize duties on the components themselves.
Officials believe that tariff measures, coupled with tax breaks in the form of special economic zones, will supplant the regime of investment agreements, which operate on the basis of government regulations, but greatly irritate the Ministry of Economic Development. According to Mr. Kushnirenko, the idea of investment agreements “has not justified itself” and has “no future.” Indeed, the main problems of the Ford company operating in this mode in Russia are primarily related to the lack of components of the required quality in Russia, which prevents the fulfillment of the terms of the investment agreement to increase the localization of the cost of the car in Russia. However, automakers are not inclined to trust Gref’s department and are rather inclined to extend investment agreements to the production of auto components, which is technically much easier and faster to do.
Officials paid special attention to the issue of joining the WTO, which threatens to undermine the competitiveness of domestic automakers. “Automobile duties,” admits Gref’s department, “remain one of the few unresolved issues during the negotiations, but the most sensitive for the domestic economy.”
The heated discussions have flared up around duties on new vehicles. The government, according to Mr. Kushnirenko, would like to be able to comply with the request of foreign investors to reduce duties in order to recoup their investments. Obviously, this is more beneficial for domestic producers, who will receive protection from the expansion of more powerful foreign competitors during the transition period. To do this, it is proposed to reserve for Russia the right to establish an increased customs rate on the import of new cars for six years (the payback period for investments), and in the seventh year to reduce it to 15%. This does not suit the USA, Japan and the EU, which are interested in gaining open access to the Russian market and do not agree to increase customs rates.
Car manufacturers have outlined their plans for the coming years. The strategic goal of car factories is a pricing policy acceptable to the population and updating the model range of cars produced.
AvtoVAZ intends to focus on the marketing strategy, since, according to the company, the price-quality ratio is the main factor for the consumer. In addition, already in June, CJSC Industrial Park will be registered with an authorized capital of $2 million, on the basis of which the production of auto components will be created jointly with the German company Ferrostal, which will own up to 48% of the shares of the joint venture.
The expansion of cooperation between AvtoVAZ and General Motors will continue. One of their joint projects is the production of the Chevrolet Niva. And an agreement has already been reached on the production (though not this year) of the GM-AvtoVAZ joint venture of the Opel Astra T-3000, which is part of the GM family of cars.
AvtoVAZ also intends to begin production of cars of the VAZ-2109 family at the Zaporozhye Automobile Plant from June 1. As you know, VAZ cars are already being assembled in Ukraine - in Lutsk, Kremenchug and Kherson.
Severstal-Auto decided to rely on the segment of cars costing 8-15 thousand dollars, which is recognized as the most dynamic in the future, as well as on cooperation with foreign investors in the field of assembly. In the near future, the company will decide on the choice of a strategic partner (negotiations are currently underway with three candidates) for the production of expensive jeeps, as well as minibuses costing over $10,000 at the Ulyanovsk Automobile Plant facilities (UAZ has experience in producing relatively cheap SUVs). Moreover, we are talking about the launch into production of car models that have already been mastered and produced in other countries. According to the general director of the company, Vadim Shvetsov, it is quite possible that KamAZ will also join the project, with which Severstal-Auto signed a general cooperation agreement in December 2002.
In addition, the company plans to organize in the second half of 2004 the annual production of 20 thousand trucks with a carrying capacity of up to 1 ton, costing 5-6 thousand dollars. A project is also being developed for the production of a light all-wheel drive minibus and, in the future, for organizing the assembly of foreign engine models at existing facilities Zavolzhsky Motor Plant.
Severstal-Auto intends to update its existing model range. From the second half of 2004, UAZ plans to begin production of the new UAZ-31XX car (30 thousand units per year), which will differ significantly from its prototype UAZ-3162 Simbir. The main goal of restyling will be to improve the design. The new car, costing 6-8 thousand dollars, will be equipped with ZMZ-514 diesel engines, a Spicer axle and most likely an imported gearbox. Since 2004, the old UAZ-3151 models will be replaced by a modernized version of the UAZ-315-195, which meets Euro-2 standards, at a price of 5-6 thousand dollars. Yana VIKTOROVA |
|
