The government has proposed the automotive industry new rules for the compensation of utilisation fees

The government has proposed the automotive industry new rules for the compensation of utilisation fees


 

dp.- The government of Russian Federation has proposed the automotive industry rules for the differentiation of subsidies to compensate for utilisation fees. The proposal includes the compensation of 60% of the costs, imposed on car manufacturers as utilisation fees, the remaining 40% differentiating according to the localisation rate of the producer. The relevant statement has been made by the Deputy Minister of Industry and Commerce Alexander Morozov, during a meeting with the representatives from the automotive industry.

“From the point of view of differentiation of the utilisation fees, or the so-called block of industrial subsidies, it was decided to determine the minimum base for guaranteed return in the presence of SKD production (welding-painting-assembly) as 60% of the volume of corresponding compensations. In other words, a company becomes eligible for compensation in the presence of a Special Investment Contract and SKD obligations, even if no investment is made. In the meantime, 40% of the volume of the block of industrial subsidies are differentiated depending on the amount of localisation achieved” – as explained by Morozov. The Deputy Minister has added that investments in R&D will not be included in this 40%.

Morozov has also noted that 2019-2020 will be a transition period and the question of the differentiation of utility fees will be addressed in 2021-2028. As told by the Deputy Prime Minister Dimitry Kozak during the meeting, drastic decisions leading to strong differentiation in the size of industrial subsidies depending on the level of localisation would be impractical. “It’s necessary to act smoothly and gradually, giving everyone the opportunity to adapt to the new rules” – he said.

At the same time, a rule on the compensation of utilisation fees in the ratio of 70% to 30%, which was proposed by a number of companies where the presence of 70% highly localised cars made it possible to receive 100% compensation for 30% less localised vehicles manufactured with the CKD method will not be applicable, in order to maintain equal conditions in each segment of the automotive industry at each level of localisation, Morozov added.