Economic Development and the Ministry of Industry

Economic Development and the Ministry of Industry have agreed on new terms the regime of industrial assembling cars in Russia. The document will be adopted before the end of the year, and until February of next year, all foreign companies will have to renegotiate its treaty with Russia.
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Ministry of Industry and Trade agreed with the Ministry of Economic Development of terms of a new regime of industrial assembling, which will be invited foreign companies. This was stated by Head of the automotive industry and agricultural machinery Minpromtorga Alexei Rakhmanov and Gref Nabiullina.
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The threshold for cars produced in Russia by a foreign company to obtain preferential conditions set at 300 thousand cars a year, said Nabiullina.


According to her, it was further agreed to install engines made in Russia for 30% of cars produced in Russia. The process of agreeing localization formulas - that it was administered and really motivated the company to localization "- the minister said, is still going.
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As it was explained to Gazeta.ru in Ministry of Industry, within a few days, possibly to be announced and the new agreement between the ministries. Finally, as a new mode of industrial assembly will be approved before the end of 2010. According to Elvira Nabiullina, "the new agreement will not cancel the already concluded, but only give additional opportunities to their members."
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In turn, Alexei Rakhmanov, said that all companies that have agreements on industrial assembly with Russia, will have to renew it until February 2011
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We are talking about agreements that have begun concluded in 2005. In exchange for a commitment to organize production in Russia, foreign companies get a reduction in import duties on Automotive - or even their abolition. Further, during the 4.5 years since the opening of full-cycle production, foreign automakers were supposed to reach 30 per cent share of all Russian production of automotive components in their products.
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Liabilities Total volume produced cars and localization undertaken by foreign companies, not satisfied with the Russian side. Therefore, the government began to develop a new version of the industrial assembly mode. Between the two ministries have been disagreements regarding the future mode of production cars in Russia. Thus, the Ministry of Economic Development offered a "flexible" with regard to foreign companies mode option - while the Ministry of Industry and insisted on more stringent.

During the discussion, the Ministry of Industry suggested that the next version - the benefits for a period of 8 years in exchange for an annual production capacity of at least 300 thousand vehicles, as well as at least 200 thousand engines and gearboxes and, finally, the creation of engineering centers.

In turn, the Ministry of Economic Development offered a softer version of the regime: automakers could extend the current agreement for one year, two, four or six years - depending on the assumed obligations.


Conditions proposed by the Ministry of Industry, caused discontent on the part of foreign companies, unable to withstand the annual production of 300 thousand cars in pieces - in fact, these revolutions by force of only a few auto giant - such as the alliance Renault-Nissan, Volkswagen and Hyundai.


As a result, this week, according to Alexei Rakhmanov, was "made a series of compromises with the Ministry of Economic Development." In particular, the Ministry of Industry and removed the requirements for volume production engines in Russia. Also, a compromise was reached on the methodology for calculating the localization of production.


In this case, the Ministry of Industry may cancel the agreement, which does not really work. Speaking at the conference "Avtoevolyutsiya-2010, Rakhmanov said that these companies, there are eight.


In particular - Ukrainian Bogdan Corporation, has entered into an agreement in 2006, within which was to open the auto industry annual capacity of 160 thousand Chevrolet Lanos and Aveo in the Nizhny Novgorod region. The company has acquired an area of 200 hectares - but the global financial crisis put paid to plans for "Bogdan" and Nizhny Novgorod company went bankrupt.