Car component manufacturers will receive additional state support

Car component manufacturers will receive additional state support


Finmarket.- The government has assigned the Ministry of Industry and Commerce and the Ministry of Finance to develop an additional support mechanism for car component production in Russia until 15 April, funded by the Industrial Development Fund – IDF.

“The mechanism will be developed to support the production of components for the automotive industry using the tools of the Industrial Development Fund, taking into account the similar instructions given with regards to the agricultural machinery production” – according to the list of instructions of Prime Minister Mikhail Mishustin published by the government.

The programme for the support of the localisation of car components has been launched in the beginning of the year in Russia. The government will co-finance car component production projects on a grant basis through the IDF in the amount of around 30% of the total cost of investments in each project, within the scope of the programme. The Ministry of Industry and Commerce has estimated the cost of the programme at more than 200 billion rubles for the duration of 10 years.

Approximately 1 billion rubles have been allocated on the 2021 budget for the support of the car component production, with the help of IDF grants. Nevertheless, Russian car manufacturers asked for an increase in the financial programmes at the end of last year. In particular, the Vice-President of Avtovaz Sergei Gromak has stated that the available funds would be insufficient to attract the major international players to the Russian market. “We are asking for assistance with the allocation of more funds for the implementation of these measures. The reason being, in my opinion, that a few billions per year won’t be enough to reach that goal. According to our calculations, the localisation of electronics in car production would require around 30 billion on its own” – Gromak said in November 2020.

Alongside additional support on car component production, Mishustin has instructed the Ministry of Industry and Commerce and the Ministry of Finance to find ways to increase the financing of the mechanism to support agricultural machinery manufacturers, provided for by Resolution N1432 on the Approval of the Rules for Granting Subsidies to Agricultural Machinery Manufacturers. The deadline is set for 15 April 2021 for this task as well.