Russia to change car production localization terms in month

BOAO, China, Mar 24 (PRIME) – The Russian government may decide in a month on adjustments of requirements for localization of car production due to devaluation of the ruble, Deputy Prime Minister Arkady Dvorkovich told PRIME Thursday.

“We are discussing a mechanism of how to adjust conditions due to the sharp rise of the rate. I will not say what adjustment it will be, but it must be done so that companies are able to continue to fulfill their liabilities in a normal mode,” he said.

He added that the government may agree on the issue in a month.

“Conditions should be changed to allow for some time to take the exchange rate’s dynamics into account and to reroute exports to other markets. The fulfillment of liabilities depends on the speed of increasing car exports. The internal market will not rebound fast, and exports will allow (producers) to compensate the domestic market’s contraction partially,” he said.

Under localization agreements signed in 2011, foreign carmakers are to reach the production localization level of 60% by 2018, launch production with an annual capacity of 300,000–350,000 cars and invest money in research and development. The list of companies includes Renault-Nissan, Daimler and Ford together with local producers AvtoVAZ, Kamaz and Sollers, respectively, and also Volkswagen and General Motors.

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