Russia to Fight Against Car Imports Avalanche

With the global economic crisis damaging sales of most carmakers around the world, governments in every country struggle to help local companies survive on the auto industry, preserve jobs and maintain their revenues. Russia is one of the best examples in this matter as prime minister Vladimir Putin already signed a law to increase import taxes on new cars by 5 points to 30 percent.

This is nothing more than a move supposed to encourage Russians to purchase locally manufactured cars which could obviously preserve jobs and maintain the same level of production. On the other hand, the Russian government aims to “force” carmakers to shift production to local factories in order to keep their sales trend unchanged.

According to Just-auto, sales of foreign carmakers were down 15 percent in November, “the first monthly decline in more than four years.” Such a thing happened despite the local companies' efforts to counteract the global recession by offering 20 percent discounts for several models, the same aforementioned source added.

Not long time ago, General Motors, the largest car manufacturer in the world and also a member of Detroit 3, opened a new production plant in St. Petersburg, estimating an annual production of no less than 70,000 units. On the other hand, Ford recently announced that it will shut down its Russian plant for approximately one month due to the same much-debated reason, namely the financial crisis. Similarly to GM, Ford produces about 75,000 units in Russia per year, with Ford Focus the best-seller.

Russian sales were down for most carmakers, obviously as a result of the global recession. Renault is probably the best example in this matter as the French company revealed a 14.1 percent market decrease for October 2008, with frozen sales on most emerging markets, including Russia, Brazil and Turkey.