The government is developing new measures of support of car industry

the Government is ready to provide tax incentives for manufacturers of automotive components. This follows from the approved December 7, Prime Minister Dmitry Medvedev implementation plan of development strategy of automotive industry up to 2025 Document published 17 December on the government website.

One of the initiatives for “development proposals” for the reduction in the VAT rate (now 20%) for automotive components. It is necessary to stimulate demand for auto components in the domestic market, the document says.

it is Also recommended to prepare proposals on tax benefits for investment in R & d in the development of technologies for the production of automotive components. This will allow to create additional conditions for developing production technologies a competitive Russian automotive components, said the plan.

Reports on both of these topics during the first quarter of next year the government should submit to the Ministry of Finance.

To the end of this year, the Ministry should submit a report on the possibility of concluding special investment contracts with organizations that have committed to develop technologies for the production of automotive components and to develop their production, said the plan.

the Representative of the FAS said that his office is co-executor for development of strategy and the executor – the Ministry of industry and trade. “In accordance with the published order will be developed within the established deadlines” – said only a representative of the Ministry of Finance. Representatives of the Ministry of industry and trade, Ministry of economic development (the Ministry should also participate in the preparation of proposals) on the questions of “sheets” have not responded.

Changes in the automotive industry. The main events for 20 years, the Strengthening of the automobile lobby, the pursuit of a global industry, the market decline Business

Concretes deals with the industry has not yet been discussed, explained, “Vedomosti” sources close to the two automakers and two component manufacturers.

Manufacturers of automotive components and automotive industry as a whole, need more support. Production declined significantly, said a top Manager of the company – manufacturer of automotive components. In 2012, a record for the Russian market, sales of passenger cars fell by 1.4 times – from 2.76 million units to 2 million in 2018 2017-2018 the market was recovery growth, but in 2019 sales again began to decline.

Apparently due to VAT rate reduction for auto component officials want to affect the prices of the cars to make them more accessible, the source continues, “Vedomosti”. But it is unlikely to succeed, he is skeptical. Automakers are, as a rule, the prices of their products only increases. On the contrary, manufacturers of automotive components in the case of reducing VAT all profits can put in his pocket, objected to the employee of one of the automakers. But those who do not, will be able in the future to increase orders from factories.

Authorities are trying VAT not to touch, so if there will be the industry decline rate is not more than 1-2 percentage points, I’m sure people close to another manufacturer of automotive components (one of the manufacturers believes that VAT in the end will not change). He is not waiting for major changes and the emergence of tax incentives for R & d investment. “Tax incentives have now come to the special economic zone and get them, he says. – Need fundamentally different measures.” As examples, he calls the direct financial support of R & d assistance to businesses in the procurement of tooling, and so on.

Requires a comprehensive approach, emphasizes another source of “Vedomosti”: not only the support of automotive component manufacturers, but also incentives for the consumption of their products – for example, in view of tightening environmental regulations for vehicles. It is important that Russia’s actions were not delayed and synchronized with other major countries. Otherwise, the effect of tax incentives for manufacturers of components will be minimal, because the meaning of investment in R & d in Russia is lost, he said.

Tax incentives – a useful tool to support existing component factories, said a top Manager of another company – the manufacturer of components. But for new businesses require investments not only in R & d, but also in construction, the organization of production, purchase of equipment. Such massive investment cannot be realized without state participation in the form of subsidizing part of the cost and concessional lending, said the interlocutor of “Vedomosti”. And this confirms the experience of countries such as China and Korea, which created from scratch high-tech industries, he said.