Global Trade Alert

With Decree 31 of 15 January 2014, the Russian government approved the allocation from the federal budget of 5.9 billion Roubles (USD 165 million) in 2014; 6.3 billion (USD 177 million) in 2015; and 6.8 billion (USD 191 million) in 2016 for partial coverage of the energy usage expenses of Russian car makers with energy-intensive production process.
 
The announced official state goals to be achieved with this state subsidy are:

• to raise the competitiveness of the local automobile industry;
• to achieve a share of Russian-made motor vehicles on the domestic market of 80% for cars, 90% for commercial minivans; 85% for trucks; and 99% for buses;
• to stimulate automotive manufacturing in the Russian regions, including Siberia and the Russian Far East.
• to increase the value added in the sector to 48% (2.2 trillion roubles).

Indirectly, this state initiative aims to compensate the Russian manufacturers of motor vehicles for the loss of competitiveness provoked by the introduction of waste disposal (scrappage) fee (see related GTA measure below).