Russia may resort to protective measures

Russia may resort to protective measures

Vedomosti – Russian Prime Minister: Dmitri Medvedev has revealed plans to resort to several protective measures in automotive, ship construction and aviation industries, in case USA and EU continue with the sanctions. Medvedev has made the following statement: “In this, we will act consciously. The government is aware of the importance of cooperation in this field, therefore we will assess our opportunities in a realistic way.” However, Medvedev has not given any solid information about the measures in question.

In recent years, thanks to inducements by the Russian government, all of the global players have established factories in Russia. However, the localisation rate in automobile production is below 50% in the country. A major part of automobile spare parts and components is still imported. Several manufacturers, who were consulted by Vedomosti newspaper, have stated that no limitation is expected on component imports. Protective measures are more likely to be implemented on already assembled automobiles. Accordingly, limitations may be applied to car imports from countries, which implement sanctions against Russia.

Japan is not included in the list of countries, food imports from which will be prohibited, announced by Russia the previous day. Car imports from this country is not expected to be prohibited, either. According to ASM-Holding data, Japan’s share in year 2013 automobile imports figure of 791,856 was 182,000. Great Britain occupies the second place with 112,526 vehicles. The number of automobiles imported from Germany is 92,000. This trio is followed by Uzbekistan, Czech Republic, USA and Turkey.

The sector members, who were consulted by Vedomosti, draw attention to the fact that currently imports do not play a key role in Russian automotive. A great majority of automobiles sold in the country are manufactured domestically. According to ASM-Holding data, the share of imported cars in the market is 27%, trucks – 46% and buses – 13%, for the first half of 2014. These ratios tend to go down with increasing production of foreign brands in Russia.

VTB Kapital analyst: Vladimir Bespalov, on the other hand, is of the opinion that the automobile imports will drop by maximum 2%-3%, due to possible protective measures. According to Bespalov, the car manufacturers may choose to shift the imports to their factories in other countries, rather than sending the products directly from EU or USA.