The government has increased the utilisation fees on cars as of 2020

The government has increased the utilisation fees on cars as of 2020


Interfax.- Premier Minister Dmitry Mededev has signed the proposal on the increase of utilisation fees on cars as of 2020, as written in Kommersant newspaper, citing the document.

“The biggest increase will take place in the passenger car segment with an average rate of 110.7%. The vehicles with up to 1-litre engines will be affected less, on the other hand with 46.1% increase. In contrast, vehicles with engine volumes over 3.5 litres will face an increase of 145%, such as: SUVs and premium sedans” – as published by the newspaper.

The utilisation fee will rise by almost 112.4% in the largest segment: the vehicles with 1.2 litres engines. The automobiles in this segment are widely manufactured in Russia.

As explained to the newspaper by the Deputy Prime Minister Dmitry Kozak’s office, the increase in utilisation fees is a reaction to the reduction in customs rates, in order to maintain the general level of tariff protection.

According to the source of Kommersant, the car prices have hit the bottom due to falling demand, the stocks have run out and everyone will have to push the prices up as a result of increasing fees.

“The indexation of the fees has already been taken into account in the draft budget for 2020: the revenue growth is estimated at 150.2 billion rubles and 48 billion rubles for 2020 qnd 2021 respectively” – as highlighted by the newspaper.

The increasing utilisation fees will have an additional impact on car prices, which would rise anyway in the beginning of the year, due to traditional updates on model ranges and other objective factors.

As promised by the Russian Minister of Industry and Commerce Denis Manturov previously, the share of the utilisation fee in the car prices will not exceed 1.5-2%. 

Increasing the fees may affect the demand for cars in direct proportion at the end of 2019, as noted by Kommersant.