Russian news service Itar-Tass is reporting that as a byproduct of
Russia’s expected entry into the World Trade Organization (sometime in 2006), government officials are wringing their
hands over the antiquated state of the country’s auto industry. With the exorbitant customs duty system that
effectively insulated Russia from external competition coming to an end in order to gain entry to the WTO,
local automotive concerns and government officials are increasingly feeling the heat of global competition.
Possibly weighing a provision similar to the Chinese, Russian officials are contemplating methods to encourage
‘joint assembly projects’ with foreign manufacturers. This isn’t a new idea in the market, as AvtoVAZ has worked with
Chevrolet for some time now, and a version of the Kia Spectra is now coming on steam in one of the marque’s other
factories. Some efforts, like that of Daimler-Chrysler, have stumbled due to local technological and logistical
constraints, and many fear that Russia lacks the technology necessary to wholly produce competitive vehicles, joint
venture or no.
Other protectionist strategies being considered include hiking import taxes, and an odd gerrymandering of what
qualifies as a ‘new’ automobile. According to the country’s Industry and Energy Ministry, Russia’s car market last year
rang up at some 1.6 million units, and sales are expected to go up by 200,000 vehicles. Forecasters predict massive
growth, with 2.6-2.8 million units possible by 2010, which makes the country’s appeal for foreign automakers
obvious.