The Russian Ministry of Industry and Commerce is changing the accounting mechanism in the localisation of automotive industry

The Russian Ministry of Industry and Commerce is changing the accounting mechanism in the localisation of automotive industry


RNS.- The Ministry of Industry and Commerce plans to abolish the mandatory technological operations for the localisation of production in Russia, as told by the deputy minister Alexander Morozov during the development of automotive industry session at Krasnoyarsk Economic Forum.

“In accordance with the opinions of the participants and regulators of the market, dramatic changes will take place in Decree 719 soon. First of all, the mandatory technological operations related to certain periods will be abolished. The format has changed since the issue period of the rulings. We’re of the opinion that we have to give the investors the opportunity to implement their investment programmes in accordance with their corporate development programmes and in line with the development level of the local suppliers of key components, which will lead to a more flexible investment process in the Russian Federation” – Morozov said.

“The points system for the evaluation of technological operations, depending on the added value will be an important new change to the Act-719. More importantly, we will issue points not only for actually manufactured car models, but also the commitments made on the production of the vehicle, within the scope of the SPIC” – added the deputy minister. According to Morozov, the requirement from car manufacturers to complete specific operations within a fixed time frame will be eliminated, within the framework of the amendments to the decree.

Based on the added value of the technical operations under the Decree 719, the body welding of cars and LCVs will bring 400 points, stamping, painting, the localisation of engines and ADAS driver assistance systems 500 points, the localisation of gearboxes 600 points, control systems 1400 points, research and development 2000 points, frames, subframes and exterior details 150 points, chassis’ 460 points, auto systems 490 points, interiors 530 points, other electrical control systems

620 points and painting 100 points, summing up to 8750 points in total.

According to the presentation of the Ministry of Industry and Commerce, in order to participate in complex competitiveness improvement programmes (Decree 191), 70% of the vehicles manufactured by an automaker must collect the following minimum number of points: 900 in 2019, 1200 from 2022 onwards, 1400 from 2025 onwards. The minimum number of points required for export logistics subsidies is 1200 in 2019, 1400 as of 2022 and 1800 as of 2025.

According to the presentation of the ministry, manufacturers have to collect a minimum number of 2000 points, in order to participate in government purchases and in demand stimulation programmes. The point requirement will increase to 3200 as of 2021, 4500 as of 2023 and 6000 in 2025. The calculations of the Ministry of Industry and Commerce cover cars and LCVs.

“We hope that the amendments in the Act will come into force soon, since Mr Kozak has issued the order. In addition, as presented, the last version of a slight increase in points is the main innovation. As told by Mr Kozak, the process is like an open book and if anyone comes up with a new conceptual technology, which is not in the list of key technologies, new suggestions are welcomed to be discussed and applied together” – Morozov added.