MOSCOW Jan 20 Russia plans to support its
struggling auto industry with subsidies of up to 271 billion
roubles ($8 billion) in the three years to 2016, the government
Russian car sales fell in 2013 and face another weak year as
a stuttering economy puts off buyers, according to lobby group
the Association of European Businesses (AEB).
The subsidies will be for research and development, to
support jobs and to compensate for some costs related to meeting
tighter exhaust emission standards, the government said in a
statement on its web site.
Russia's largest carmaker is Avtovaz, maker of the Lada,
which is set to be controlled by Franco-Japanese alliance
Renault-Nissan by mid-2014. Other foreign
carmakers have invested heavily in the country, such as Ford
and General Motors.
Russia introduced a recycling fee for imported cars in 2012,
angering the European Union which argued the fee - to cover the
cost of scrapping a car when it becomes too old to drive - was
not compatible with Russia's membership of the World Trade
The United States and Japan also complained about the levy.
The Russian government responded last year by saying it
would apply the same fee to all cars - whether imported or
manufactured in Russia - and some analysts said the latest
support was a way of offsetting the cost for domestic carmakers.
"The introduction of subsidies will reinstate such
government support to the industry at no additional cost to the
budget," analysts at Bank of America said in a research note.
The WTO was not immediately available for comment.
Russia last year tried to prop up car sales with credit
incentives. The programme ended in December.
The government said Russia aimed to increase production of
cars to 3.1 million units a year and light commercial vehicles
to 280,000 units per year, without giving comparative figures.
Data from the AEB last week said car and light commercial
vehicle sales are expected to fall by 1.6 percent in Russia in
2014 to 2.73 million units.