The possible trimming of the automakers’ product lineups would exclude SUVs, consistently good sellers relative to the overall market in recession-battered Russia.
Local brands are benefiting from higher percentages of localization, price increases lower than those of foreign brands and state programs aimed at supporting demand, particularly those in the low-cost segment of the...
The ongoing economic crisis in Russia may prompt the government to cancel tariff-discount agreements with other foreign parts producers and even global automakers failing to comply with local-content requirements.
The government says the proposed increase in utilization fees, enacted when import duties were cut as Russia joined the World Trade Organization, reflects continued devaluation of the ruble.
Annual production capacity at Vsevolozhsk is 160,000 units, but Ford built just 30,000 cars there in 2014, laying off 700 employees as a consequence. Output for full-year 2015 is estimated at only 15,000 units.
A spokesman for Russia’s Industry and Trade Minister says most of the new subsidies will compensate local automakers for interest rates on bank loans and for losses resulting from currency fluctuations.
Despite the difficult market conditions, Hyundai Russia’s plant has been operating five days a week on three shifts, without any production interruption or staff cuts.
A spokesman says Industry and Trade Minister Denis Manturov endorses the tax break, as the automaker has suffered from the devaluation of the Russian ruble and an increase in the key rate of the Russian Central Bank.
According to automotive analysts ASM-Holding, employment in the Russian auto industry has declined 10.5% since May 2014, from 205,134 to 183,534 workers, and a new wave of layoffs may take place by the end of the year.