Government support system for the automotive industry will change in Russia

Government support system for the automotive industry will change in Russia


 

Rossiyskaya Gazeta.- A new system of government support will come into force for the automobile industry in Russia, as of July 1, which will be based on a points system. The relevant statement has been made by the deputy prime minister Dmitry Kozak.

According to Kozak, the companies in Russia will be able to choose the components to be manufactured in Russia themselves and get the necessary points to receive subsidies. The points will be determined in accordance with the amount of added value. The more localisation of production in Russia, the more points to be obtained. The points required to get subsidies will be risen each year. The implementation of the system is planned to be launched in 2021. The points required for subsidies will not be too high in the initiation process. As told by Kozak, the government support in Russia has been formulated in a flexible way, since the companies in the market are on different levels of development and manufacture different car models or components.

As stated by the minister of industry and commerce Denis Manturov previously, car production has risen by 14% in Russia in 2018. Approximately 1.9 million automobiles have been manufactured, 1.75 million of which were produced by domestic companies. Russian Lada Vesta was amongst the top-ten most-manufactured models and brands in the country in 2018. Lada Granta was another model in demand. As told by the deputy minister of industry and commerce Viktor Evtukhov to RG, there are approximately 100 large enterprises manufacturing car components in Russia.

In addition, according to the evaluation of the assistant professor of economic theory at Plekhanov Russian Economy University: Oleg Cherednichenko, the “injections” into the automobile industry in 2018 have exceeded their return five times (taking into the account the budget revenues from the utilisation fees). “For that reason it seems logical to amend the mechanism of interaction between the car manufacturers and the state. The key factor here is that the car brands with the highest levels of localisation in Russia will end up as winners. The government also implements its macro-economical function in this area by maximising the added value created in the Russian Federation and increasing employment in the industry” – Cherednichenko points out.