"Vedomosti": "Car duties get a second term"
Prime Minister Vladimir Putin has extended higher duties on foreign cars for another nine months. However, next July the government will be able to bring duties on new cars back down to pre-crisis levels.
Minister of Industry and Trade Viktor Khristenko said on Friday that the government had decided to extend higher import duties on foreign cars for another nine months. The Prime Minister's Press Secretary Dmitry Peskov said that every ministry and the Government Executive Office endorsed this. He did not specify whether the document itself had been signed by the Prime Minister on Friday.
A Rossiiskaya Gazeta employee told Vedomosti that his newspaper had received a resolution signed on October 9. It will be published today.
On December 5, 2008 Mr Putin signed a resolution imposing higher import duties on foreign cars for a period of nine months. It came into force on January 12, 2009 and so expires today.
An official, who is a member of the government commission on protective measures, said that they had not even discussed the possibility of revoking these higher duties. Their reasoning is that since they have not yet produced the desired effect, these protective measures should be extended. A Ministry of Industry and Trade official said that this commission recommended extending the duties on August 19. Two employees at the Economic Development Ministry told Vedomosti that the government had received a draft of the resolution on September 18. Mr Peskov explained that this delay in its signing was due to the Prime Minister's busy schedule.
A Ministry of Industry and Trade official said that the new resolution leaves the duties at the current level. He explained that the decision to extend the duties for another nine months is an anti-crisis measure: "Since the crisis is not over yet it is still too early to revoke the duties. However, it is not worth making them permanent. We need to see what the market is like in nine months' time."
Two government officials who are members of this same government commission said that the duties on new foreign cars might be revoked after this "second term." The ministry officials told Vedomosti that duties on used foreign cars may be imposed on a permanent basis because those cars hinder Russian producers.
VTB Capital analyst Vladimir Bespalov said that in the first half of the year car dealers were selling cars that had been imported in 2008, and the influence of these higher duties on the sales of new cars was not great. However, as the 2008 car fleet dwindles, the influence of higher duties on sales will rise, he noted.
Peugeot Citroen ran out of its 2008 reserves several months ago but higher duties do not seem to be influencing sales too greatly. Spokeswoman for PSA Peugeot Citroen Oksana Vershinina said that Peugeot sales dropped by 32% in the first three quarters (the market as a whole fell by 51%), while Citroen sales even rose by 15%.
Spokeswoman for Renault Oksana Nazarova observed that higher duties do not fuel demand: "Right from the start we suggested introducing car scrappage incentives, instead of higher duties. The example of other countries has shown that this is the most effective anti-crisis measure."
By Alexei Chechel
