The Russian authorities have long ago turned the “use fee” and the “degree of localization” into a lever that drove the world’s auto giants to the territory of our country. The higher the localization, the less the car manufacturer spends in the long run on the recycling fee for the benefit of the state. To understand the sequence of numbers, let’s say that for a new passenger car with an engine capacity of 1-2 liters, the amount of the recycling fee is 178,000 rubles. For a car with a 2-3 liter engine – more than 280,000 rubles, and so on. The car supplier (importer or manufacturer) is forced to include these amounts in the final cost price of their goods, losing price advantages over competitors.

The Ministry of Industry and Commerce calculates the degree of localization in points. 2500 points scored – the state will refund the full recycling fee to you. Until recently, the car plant in Russia could get most of these points by stamping body parts themselves, their welding, painting and other things. When car parts suppliers began to leave Russia due to sanctions, it suddenly became clear that a highly locally painted body with domestic wheels and interior mats could not become a full-fledged car. Because it also needs an engine, a gearbox, electronics and a lot of other “little things”. The presence of which is strictly “tied” to the input.

For example, at the recently ended exhibition CTT-2023, the plant showed its cars of the K5 family. They have a gearbox and a “razdatka” – from the Chinese Fast Gear. Bridges are Chinese HanDe. Pneumatics – from the Chinese SORL, hydraulics – Hyva (also from China). From there, electronics, fuel equipment, a turbine … Meanwhile, the salvage tax on trucks is even higher than on cars. There, from 300,000 rubles, everything is just beginning and reaches 1.35 million for a vehicle with a gross weight of more than 20 tons!

We suspect that after the innovations of the Ministry of Industry and Trade, AVTOVAZ localization indicators will noticeably decrease. Especially if you remember that even the door hinges for LADA Niva were once bought in Europe, and only relatively recently there was a transition to domestic ones. What can we say about electronics, details of power units and so on. In their nomenclature, you can definitely find a bunch of Chinese.

We think that the officials of the Ministry of Industry and Commerce, who devised the reform of the “points system”, will most likely come under heavy lobbying pressure: the top management of KamAZ and AvtoVAZ have plenty of opportunities in this sense. But we will hope that it is not the lobbyists that will win, but the state approach to national interests in the auto industry. And in Russia, albeit under duress, a more or less self-sufficient auto parts industry will appear. Without Chinese “roots”.

The Russian authorities have long ago turned the “use fee” and the “degree of localization” into a lever that drove the world’s auto giants to the territory of our country. The higher the localization, the less the car manufacturer spends in the long run on the recycling fee for the benefit of the state. To understand the sequence of numbers, let’s say that for a new passenger car with an engine capacity of 1-2 liters, the amount of the recycling fee is 178,000 rubles. For a car with a 2-3 liter engine – more than 280,000 rubles, and so on. The car supplier (importer or manufacturer) is forced to include these amounts in the final cost price of their goods, losing price advantages over competitors.

The Ministry of Industry and Commerce calculates the degree of localization in points. 2500 points scored – the state will refund the full recycling fee to you. Until recently, the car plant in Russia could get most of these points by self-stamping body parts, their welding, painting and other things. When car parts suppliers began to leave Russia due to sanctions, it suddenly became clear that a highly locally painted body with domestic wheels and interior mats could not become a full-fledged car. Because it also needs an engine, a gearbox, electronics and a lot of other “little things”. The presence of which is strictly “tied” to the input.

For example, at the recently ended exhibition CTT-2023, the plant showed its cars of the K5 family. They have a gearbox and a “razdatka” – from the Chinese Fast Gear. Bridges are Chinese HanDe. Pneumatics – from the Chinese SORL, hydraulics – Hyva (also from China). From there, electronics, fuel equipment, a turbine … Meanwhile, the salvage tax on trucks is even higher than on cars. There, from 300,000 rubles, everything is just beginning and reaches 1.35 million for a vehicle with a gross weight of more than 20 tons!

We suspect that after the innovations of the Ministry of Industry and Trade, AVTOVAZ localization indicators will noticeably decrease. Especially if you remember that even the door hinges for LADA Niva were once bought in Europe, and only relatively recently there was a transition to domestic ones. What can we say about electronics, details of power units and so on. In their nomenclature, you can definitely find a bunch of Chinese.

We believe that the officials of the Ministry of Industry and Commerce, who came up with the reform of the “points system”, will most likely come under heavy lobbying pressure: the top management of KamAZ and AvtoVAZ has enough opportunities in this sense . But we will hope that it is not the lobbyists that will win, but the state approach to national interests in the auto industry. And in Russia, albeit under duress, a more or less self-sufficient auto parts industry will appear. Without Chinese “roots”.