By on January 22, 2014

The Russian government said that it will spend up to 271 billion rubles ($8US billion) over the next three years to subsidize the country’s struggling auto industry. A government web site said that the subsidies will underwrite research & development, jobs and costs related to more stringent emissions standards. Car sales in Russia in 2013 fell by 6% to 2.78 million units and 2014 looks like another weak year as the Russian economy stutters, according to the Association of European Businesses.

A 2012 effort to prop up Russian automakers, a recycling fee for imported cars supposedly to pay for scrapping the cars at the end of their life cycles, raised issues with the World Trade Organization so that fee was expanded to include locally manufactured cars as well. The new indirect subsidies are less likely to run afoul of the WTO.

A government incentive program for car consumers was also tried last year but the program ended in December.

Get the latest TTAC e-Newsletter!


10 Comments on “Russian Government to Spend $8 Billion Subsidizing Local Car Industry...”

  • avatar

    Pretty much Russia is refunding the recycling fee paid by domestic companies. I know they stated it costs nothing in the budget. They are pretty much just shifting money around.

    As for emissions complain Euro 3 just went into effect. Euro 4 is coming soon.

  • avatar

    I think Russia went to Euro 4 at the beginning of this year. They really shouldn’t have problems with those regulations, as they’ve built Euro 4 and 5 cars for export markets for years. Even the Niva, with its 1960s engine, passes Euro 5 with flying colours.

    • 0 avatar

      You’re right went into effect this month. Euro 5 is 2016. The biggest problem is the engines in trucks and busses. I do hope this helps with the horrendous air quality here.

  • avatar

    I love the simple and utilitarian design of the Niva. A breath of fresh air in these times of tiny windows and gaping maws. The interior is also wonderfully cheap and basic. I’d love to have a new one over here as a weekend 4×4, but only if I had access to plenty of spare parts :)

  • avatar

    I’ve seen those dashcam videos. The general public looks to be doing a great job of trying to promote industry growth.

  • avatar

    And in other news…Fiat is going to suck $8B out of Chrysler to subsidize Fiat.

  • avatar

    I feel sorry for the Russian consumers. In the end, because of the government efforts to prop up the perpetually ill national industry, the consumers end up paying far higher prices for car than they would have otherwise. It’s like Brazil 2.1.

  • avatar

    Neat little cars IMO .


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • ToddAtlasF1: The article says that Skoda is the exception to VW’s subsidiaries being profitable.
  • ajla: It is about $1000 to get a natural wood interior in the ES and it is the best $1000 you will ever spend.
  • JimZ: And I’m not a big fan of helping pay for *your* state’s roads. see how that works?
  • brn: CA has more money than any other state. I’m not a big fan of paying for CA’s mass transit.
  • th009: Skoda is highly profitable, and Seat is finally getting there (thanks to much-delayed crossover models)....

New Car Research

Get a Free Dealer Quote