Both Russia and foreign car concerns will benefit from tightening the requirements for entering the Russian car market, a leading expert from the Russian Avtostat think tank told RIA Novosti on Monday.
Earlier on Monday, Russian business daily Kommersant said that a group of car manufacturers, including French Renault, as well as Fiat partner Sollers and Russian AvtoVAZ, had asked the government to introduce a minimum assembly requirement of 300,000 cars per year by 2013-2014 for foreign auto producers.
"This requirement is more acceptable for foreign car producers with serious intentions of entering the Russian market," Andrei Toptun said.
He explained that nowadays it is quite profitable for foreign companies to import car parts and assemble automobiles in Russia because customs duties on car part imports are very low.
"Of all the foreign investors planning to open production in Russia over the next few years, only Renault, Fiat's partner Sollers, and Russian AvtoVAZ, intend to build large plants. Most of the other foreign car producers cannot be called serious (investors in Russia). They prefer opening small production lines and assembling cars with parts imported from other countries."
Toptun believes the tightening of requirements could encourage foreign car firms to make major long-term investment or go.
According to the expert, it would be much better for Russia if Western auto concerns opened large plants and produced car parts and assembled vehicles. This would lead to lower prices on cars and the creation of jobs in regions where the plants are built.
"The Russian car market is very large. For example, more than 3 million cars were sold in Russia in 2008; however, even this will be saturated one day," Toptun said, adding: "That's why car producers want to have their share in the niche right now."
If the minimum assembly requirement comes into force, foreign car producers would have to receive the exclusive intellectual property rights on cars and motors produced in Russia, according to the project plan.
Toptun said this is a very sensitive requirement because operating with foreign licenses means Russian plants are unable to bring crucial changes to the assembly process. Moreover, possessing exclusive intellectual property rights on car production will enable Russian assembly lines to be more independent from Western corporate heads.
In line with this project, the expert mentioned the Chinese car market which he said is strong and stable due to tough rules and regulations.
MOSCOW, April 19 (RIA Novosti, by Tsvetelina Miteva)
