The government has allocated 500 million roubles to subsidize transportation of automobiles from the Far East.
Prime Minister Vladimir Putin unveiled the first automobile plant in Russia's Far East, launched by the Sollers automaker.
Sollers has been the only company to respond to the government's call to create an alternative to importing used foreign cars to the region. Not wishing to frustrate the plant's sales prospects on the local market, the government is ready to offer compensation for the transportation of vehicles to central regions. It allocated 500 million roubles to do so this year, which should be enough to transport Sollers' planned annual output.
A Sollers plant in Vladivostok opened late last year. Investments in the project were estimated at 5 billion roubles. During the first stage, the plant will produce 15,000 vehicles annually. By 2012, its production capacity will increase to 40,000 vehicles, and include South Korean Ssang Yong SUVs, Isuzu commercial trucks and Fiat Ducato-based special purpose vehicles (SPVs). The plant also plans to assemble special UAZ SUV models. As the new automobiles are not too popular in the Far East, last year Sollers asked the government to compensate its expenses for transporting the new vehicles to Central Russia.
On April 12, Putin signed Resolution No 222 on the transportation of new automobiles produced in the Far Eastern Federal District by the Russian Railways company, a government source reported.
Russian Railways was instructed to ensure the free delivery of vehicles produced in the Far East to other regions, with the company's losses being compensated by monthly budget subsidies. Based on the resolution, 500 million roubles will be earmarked for this purpose this year. The vehicles covered by the plan include models such as the Ssang Yong Actyon, Actyon Sports, Kyron and Rexton, as well as the Isuzu NQR, NLR and CYZ trucks produced by the Sollers Far Eastern plant.
The plan is the mirror opposite of a scheme proposed by the government last year to transport vehicles produced in Central Russia to the Far East. The government allocated 2 billion roubles for the project in 2009, but it failed to produce the desired effect, with just over 50 million roubles spent on the project. According to government documents, it cost roughly 32,000 roubles to transport one vehicle.
If the average transportation costs remain the same, then the new programme's budget will suffice to transport about 15,500 vehicles from the Far East. However, Yury Kosov, the first deputy general director of RailTransAuto, a Russian Railways subsidiary dealing with auto transport, said it costs about 50,000 roubles to transport one vehicle from the Far East to Central Russia. Thus, in keeping with his opinion, the money would suffice to transport no more than 10,000 vehicles. Kosov added that the plan will work as there is a demand for Sollers vehicles on the Russian market.
Meanwhile, the Association of European Businesses reported that only 1,805 Sollers-produced Ssang Yong cars and 31 Isuzu trucks were sold in Russia during the first quarter of this year. However, Kosov said 693 vehicles produced by the Sollers Far Eastern plant were transported to Central Russia in March alone, and over 2,200 vehicles are planned to be transported in April-May. Meanwhile, the Sollers plant in Vladivostok plans to produce 1,300 vehicles in April, 1,100 in May and 1,500 in June. This means the company hopes to sell about 10% of its monthly output on the local market. As a spokesperson for Sollers, Zoya Kaika, said, before the government resolution the company paid for vehicles transportation to Central Russia itself. Sollers hopes the government will compensate these expenses.
Yevgenia Chelianova