Russian govt to discuss automobile industry strategy Thursday

MOSCOW, -- The Russian government on Thursday will discuss a development strategy for the automobile industry till 2020, a source in the Cabinet of Ministers said on Wednesday.

According to the official, the document identifies an optimal scenario for the industry’s development.

“We have emphasized four main segments – cars, light commercial vehicles, trucks and busses,” he said. “A forecast has been made for each segment and a scenario for the industry’s development has been formulated.”

The strategy, said the source, implied preservation of the existing level of export taxes and tariffs for the medium term.

“We estimate the medium term approximately till 2015,” he said. The share of the automobile industry in Russia’s gross domestic product is to reach 2.4 percent by 2020.

By the same year the market of cars is to achieve 3.5-3.6 million a year, including 20 percent of imported ones. The share of Russian automobiles meant for export is estimated at 8 percent. The capacity of the light commercial vehicles market by 2020 is estimated at 350,000, including 30 percent to be imported, of the trucks market, at 190,000,including ten percent of imported ones, and of busses, at 27,000, including five percent of import ones.

The strategy envisages certain measures to stimulate demand, tax and insurance measures, tariff and non-tariff control and measures to support the domestic automobile industry.

Also, there are plans for stimulating high-technology industries, subsidizing interest rates on loans, loan repayment grace periods for up to five years, government guarantees against borrowings and creation of the research and development base, the source said, adding that a number of projects were to be financed directly from the budget. The latter measure would apply to military vehicles and dual purpose ones first and foremost.

The strategy encompasses the financing and creation of clusters for the manufacture of components. Some such clusters are to emerge in the Northwestern Federal District and the Volga and Central federal districts.

“If we undertake to finance part of the costs, we shall lay a good basis for the components manufacturers to match assembly projects,” he said.

The government hopes that the automobile industry development strategy till 2020 will increase the added value of the automobile industry in Russian territory several-fold from today’s 495 billion rubles to 2.25 trillion rubles, the source said.

Source Indiacar.com Source : www.itar-tass.com (3/3/2010)