Russian National Auto Components Producers Association executive director Mikhail Blokhin noted that, in spite of the fact that all major foreign carmakers have plants in Russia, there have been no large-scale projects to manufacture components.
Photo: Sergey Mikheev
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Russian Auto Industry Wins against WTO
Russia is breaking preliminary agreements made in the framework of the World Trade Organization and accepting applications for the production of automobiles through industrial assembly, under an order issued by the Ministry of Industry and Trade that has been conciliated with the Ministry of Economic Development and forwarded to the Finance Ministry. It may come into force in the next few days. Industrial auto assembly was called off in September 2007 as contradictory to WTO norms.
Until today, only companies that had signed memoranda with the Ministry of Economic Development before October 30, 2007, could sign agreements on industrial auto assembly, and the majority of memoranda have expired. Under a September 2006 government resolution, producers of auto components could import vehicle modules with minimal duties applied (0-3 percent, instead of 5-20 percent) if they agreed to reduce the volume of imports by 30 percent within three and a half years.
Russian President Vladimir Putin made the decision to reconsider several bilateral agreements with the WTO in August after the conflict in the Caucasus and the Bush administration’s declaration that Russia’s membership in the organization was “not close.” A source in the Ministry of Economic Development commented that “That issue is insubstantial as part of the trade negotiations and is not likely to be able seriously to influence the negotiating position of the Russian Federation in the WTO. We can reach an agreement with our partners on industrial assembly. The questions that remain on the agenda are much more problematic.”
A source in the Ministry of Industry and Trade commented that “We hope that factories that are now in the stage of large-module assembly will proceed to the stage of localization of auto components in the nearest future, which will give a significant boost to components production. Limitations on the deadline for the acceptance of application played a negative role in the process of meeting obligations for localization of auto assembly production.”
Up to 60 percent of the price of a car in Russia is on account of its components. The remainder is labor costs, amortization, R&D and advertising. About 440,000 cars were assembled from foreign parts in Russia last year.
www.kommersant.com
All the Article in Russian as of Oct. 28, 2008
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