Mr. Putin must be reading TTAC. Barely did we report that the Russian market is coming back to life, Vladimir Putin stepped in front of the cameras in Moscow, and announced killer measures to put the Russian auto market back into its place.
In a speech today, Putin announced that import tariffs for new cars will be increased “step by step.” He didn’t mention any numbers or dates, but the buyers of that Mulsanne better hurry. And it’s not that importing cars to Russia is particularly cheap right now. Currently, there is a 30 percent import duty on any new car. Smug Vladimir said that Russia is not part of the WTO, so they can put their import duties as high as they damn please.
Thinking of selling used Cadillacs to Russia instead? Better think again. Cars older that 5 have been slapped with an import duty between €3 and €5.70 per cubic centimeter displacement. Let’s see. A 5 year old 6 liter Escalade would cost $44,460 in import duty alone. Makes a new one look like a bargain. And that’s exactly what Putin has in mind.
“Moscow wants to force foreign auto makers to open their own plants in Russia,” says Automobilwoche [sub].
And they better bring the very latest technology, or Vladimir will have serious issues with them. He will not tolerate that foreigners “flood our market with garbage, and turn our country into a scrap heap for outdated technology.”
The Russian market must be doing really well for investor to put up with these shenanigans.
And just in case you are wondering why Russia needs new technology, have a look at the former Moskvich factory.
PS: One company already got the message: The manufacturer that is owned by that other government. The Moscow Times reports that “General Motors may need to double production capacity in Russia to meet demand and is in talks with potential partners, including billionaire Oleg Deripaska’s GAZ Group.” GM currently has capacity to make 180,000 cars in Russia. Deripaska – wasn’t her the ugly Russian GM didn’t want to trust with Opel’s precious trade secrets? Wasn’t he the guy GM contacted immediately after the deal broke up? Yep, the same guy who had to cut a deal with the FBI to get his U.S. visa back. The very same.