Government has approved Special Investment Contract applications of 5 OEMs

Government has approved Special Investment Contract applications of 5 OEMs


Kommersant.- The Interdepartmental Commission on Special Investment Contract (SPIC) has approved the applications of Volkswagen, PSA, GM-AvtoVAZ, Volvo Trucks and Avtotor. The manufacturers have to sign the SPIC by July 1, in order to get access to industrial subsidies (de facto compensation of utility fees), on which the profitability of production in the Russian Federation depend. The projects supported by the Commission correspond with the goals of the development strategies of the automotive industry for the period up to 2025, as stated by the Ministry of Industry and Commerce and the implementation of the projects will ensure the attraction of more than 74.5 billion rubles private investment in the real sector and approximately 1.3 trillion budget revenues in the form of various tax deductions and fees.

There were disagreements on all approved applications, apart from GM-AvtoVAZ (the project was not known by the public previously). For instance, the Ministry of Industry and Commerce expected the localisation of gearboxes from Volkswagen, however, the German manufacturer has insisted on the fact that such an action would not be feasible in economic terms. Volkswagen wanted to double the production of 1.6 litre engines in Kaluga, within the scope of the Special Investment Contract.

Peugeot-Citroen alliance has applied for the SPIC in April. The project is about the creation of new production and the modernisation of the current lines of Peugeot, Opel and Citroen vehicles. The company will also master the production of internal combustion engines.

Volvo Trucks (Volvo Vostok) will localise the automatic gearboxes within the framework of the SPIC. No manufacturer makes the local assembly of trucks with automatic gearboxes in Russia today. The investment made by Volvo within the scope of the Special Investment Contract will reach approximately 9 billion rubles.

The project of Avtotor provides for the modernisation of the current capacity and the creation of new industrial production in Kaliningrad region, as part of which the launch of a wide range of BMW, KIA, Hyundai and Genesis cars and LCVs and Ford trucks is planned. A switch to the welding and painting of the aforementioned vehicles is planned as part of the SPIC and the production figure will exceed 30,000 units per year.

It should be noted that BMW, who had recently planned to build a plant signing a contract for this purpose, has entered the Special Investment Contract of Avtotor. However, according to Kommersant, the work on the application, which is still held by the Ministry of Industry and Commerce, has been put on hold by the German manufacturer itself. In the meantime, alongside BMW, the application of Chinese Great Wall Motor, who recently established a plant in Tula region manufacturing engines under the brand name of Haval, is also pending.

Tags: SPIC