Russia will gradually raise import duties on foreign cars to encourage international car producers to build new plants in the country, a Russian business daily said on Tuesday, citing Prime Minister Vladimir Putin.
"In a few years, we will begin to gradually raise customs tariffs," Putin said. "We are not, after all, members of the WTO and [we] can afford it," he added.
"But we do not want to undermine your [foreign carmakers'] business in Russia, come to us and set up production here," Putin said.
A Russian Industry and Trade Ministry official said he was surprised by Putin's announcement as the Russian domestic car industry development strategy stipulates that taxes should remain the same until 2016, after which they will be lowered.
The ministry is going to follow the existing strategy, the official said.
There has been a big increase in the number of foreign car makers assembling cars in Russia in the last decade. Renault, Nissan, Toyota, GM, Ford, Volkswagen, Peugeot, and Citroen all now have production plants in the country.
A total of 157,561 cars were produced in Russia in the first half of the year, and 251,300 foreign cars were imported into the country during the same period.
The increase of import taxes is a very effective measure, Ernst & Young car industry consultant Ivan Bonchev said. In 2009, after Russia introduced duties on used foreign cars more than three years old (a minimum of 35 percent of the car's price), imports of such vehicles virtually ceased, giving the Russian car industry a significant boost.
MOSCOW, August 31 (RIA Novosti)
