At the beginning of the new year, Russia’s accession to the World Trade Organization (WTO) in 2011 has become a topic of great concern to the international community. According to news from the Russian News Agency, Prime Minister Vladimir Putin said at the end of 2010 that although there are still some problems, Russia is very likely to enter the WTO in 2011.
According to analysis by industry insiders, if Russia enters the WTO, it will have a greater impact on the domestic auto industry. At present, Russia imposes higher import tariffs on foreign cars to protect the development of the local automobile industry. Putin said that once it enters the WTO, Russia may adopt other measures in support of domestic industries instead of tariffs. He said: "If we see the auto industry in an unfair competition environment, we will adopt non-tariff measures such as technical regulations."
WTO accession will push Russia to reduce the tariffs on imported cars. The auto industry has always occupied a very important position in the economic development of Russia, providing employment opportunities for about 1.35 million people. It is precisely because of this that Russia has a good reputation for its own car industry, and levying a high tariff policy on imported cars is a typical example. It is understood that the country’s current auto import tariff policy is based on Putin’s order to change the tariff of certain motor vehicles issued in December 2008, and will be implemented from January 12, 2009, tentatively scheduled for 9 months.
As the size of the Russian auto market continued to shrink, the operating conditions of local auto companies did not show much improvement. After the expiry of this temporary policy, the implementation did not stop, but it extended for 9 months. In December 2010, Rakhmanov, director of the automotive industry department of the Russian Ministry of Industry and Trade, stated that the country’s high tariffs on imported vehicles will not decrease until 2014 or 2015.
However, joining the WTO may result in Russia having to adjust this policy. Experts told reporters that according to the regulations, after joining the WTO, Russia should abandon the measures to protect domestic automobile manufacturers by imposing high tariffs on imported cars. Perhaps because of this consideration, Putin made remarks that he will take other measures to protect the domestic automobile industry.
Entry into the WTO will test the high tariff policy of the Russian automotive industry, which greatly limits the export of foreign cars to Russia. In early 2009, after the policy came into effect, many multinational car companies could only use the method of building KD assembly plants in Russia to open up the market. According to a report released by Russia’s statistical agency, 2/3 of foreign cars made in Russia are assembled from imported KD parts.
If Russia succeeds in entering the WTO, the reduction of auto import tariffs will bring more opportunities for multinational car companies. They will seize the opportunity to develop new markets. At the same time, however, Russia's domestic auto industry will be greatly affected. It is reported that the transition period for the reduction of import tariffs of truck manufacturers in the country is very short. In 2012, the current 25% will be reduced to 15%, and in 2015 it will be reduced to 10%. In contrast, the situation of Russian domestic passenger vehicle manufacturers is better. After joining the WTO, the tariff of imported passenger cars in the country needs to be reduced from the current 30% to 15% within 7 years.
Compared with foreign competitors, Russian automobile manufacturers are at a disadvantage in product development, production and marketing. Before the increase in auto import tariffs, the country's imported and domestic car markets performed almost equally. At present, the market share of imported Russian cars has fallen below 30%, especially for imported used cars, and sales have dropped substantially.
The entry into the WTO is the key to Russia’s economic development, and its determination to join the WTO is very firm. It is reported that Russia's application for accession to the WTO has lasted for 17 years and is by far the longest application process. In 2010, the country signed agreements with the United States and the European Union respectively to remove the major obstacles to entry. However, how to protect the development of the domestic automobile industry while fulfilling various commitments after the accession to the WTO is a problem that the Russian government needs to solve. For the country’s auto companies, the days of living in the “greenhouse†may not be long, and improving their competitiveness as soon as possible is fundamental.
Russia's accession to the WTO is conducive to the export of Chinese cars. Russia is a major exporter of Chinese auto companies. According to data from the European Business Association, China's Chery Automobile sales in Russia were 8477 units in the first 11 months of 2010, a year-on-year increase of 95%; Lifan Motors' sales volume was 6765 units, an increase of 157% year-on-year; Great Wall Motor's sales were 3,189 units, an increase of 35% over the same period last year. %.
“Russia’s trade barriers are high, and the tariff for each imported car is even as high as US$5,000. Therefore, it is not realistic to export cars to Russia. It is more favorable to open assembly plants,†said Shang Yugui, deputy general manager of Great Wall Motors. Similarly, Chery Automobile's business in Russia is also dominated by KD assembly plants. Jin Yibo, assistant to the company’s general manager, said: “Chery is now also focusing on the KD assembly business, which is produced by local Russian companies and Chery’s team is responsible for sales.â€
Shang Yugui stated that Russia's accession to the WTO will benefit Chinese auto exports. He said: "After Russia's accession to the WTO, we are expected to gain more opportunities for development. Great Wall Motors will be able to integrate the entire vehicle with Russia and integrate with the local KD assembly business to expand its development space."
Song Jinjin, general manager of China National Heavy Duty Truck International Marketing, also told reporters: "Since two years ago, Chinese car makers were in a difficult position in Russia's market development, the Chinese cars that were sold locally had very difficult to enjoy after-sales service in the past two years. This hurts. The reputation of the Chinese car.After Russia's entry into the WTO, Chinese car companies can more easily enter the Russian market and improve after-sales service."
Russia's Automobile Policy Trends in 2010 On March 8, 2010, Russia officially launched a trade-in replacement program for subsidized vehicles, which stipulates that owners of cars that have been scrapped for more than 10 years (including 10 years) will receive a discount of 50,000 roubles when buying a new car.
On December 21, the Russian Ministry of Economic Affairs and the Ministry of Industry determined new regulations for the assembly of the automobile industry. After four years of signing a joint venture agreement, foreign automakers will receive preferential treatment on imported auto parts in Russia with an annual output of 300,000 vehicles. As an additional bonus, during the entire period of validity of the agreement (8 years), the Russian government allows foreign car manufacturers to produce 5% of the entire vehicle in a loose-packed form. In addition, the government abandoned the idea of ​​setting a minimum investment threshold (previously planned to be 750 million U.S. dollars), but foreign automakers need to negotiate with the government about the model list of cars produced.
On December 24, Russian Prime Minister Vladimir Putin promised that the government will allocate 17 billion rubles for the auto industry next year. Among them, 13.5 billion rubles were allocated for car trade-in projects.
On December 29, Russian media reported that the country’s government will draft a proposal for a plan to purchase cars for trucks and buses. The policy will be introduced in the first quarter of 2011.
Chinese auto companies have confidence in expanding the Russian market. Will Chinese auto companies adjust their market strategies after Russia's entry into the WTO? In this regard, the Deputy General Manager of Great Wall Motor Shang Yugui said: "The key is to see the specific outcome of the negotiations between the Chinese government and the Russian government. If the tariff rate determined is suitable for export, we will export the whole vehicle. As an automotive manufacturer, we will Stay tuned for this."
Assistant manager of Chery Automobile, Jin Yibo, told reporters: “We have no plans to export Russia to Russia, and we will not adjust our market strategy in the short term. After joining the WTO, Russia will reduce tariffs on imported cars and develop Chery’s vehicles locally. It is definitely beneficial."
In the future, the Russian government may adopt technical regulations and other means to protect the domestic auto manufacturing industry. In this regard, Shang Yugui said: “This will not affect Great Wall Motors. Our four vehicles have passed the EU certification and are exported to Italy. In European countries, EU vehicle certification is arguably the most stringent international automotive certification standard, not only recognized by the European Union, but also approved by many countries around the world.We are confident that technical regulations will not affect Great Wall Motor’s exports to Russia. According to Jin Yibo, the Russian government has been increasing its requirements for the certification of imported automotive technology in recent years. "But this has no effect on us. Chery products are produced according to European standards and can meet the requirements of exporting to the Russian market."
According to analysis by industry insiders, if Russia enters the WTO, it will have a greater impact on the domestic auto industry. At present, Russia imposes higher import tariffs on foreign cars to protect the development of the local automobile industry. Putin said that once it enters the WTO, Russia may adopt other measures in support of domestic industries instead of tariffs. He said: "If we see the auto industry in an unfair competition environment, we will adopt non-tariff measures such as technical regulations."
WTO accession will push Russia to reduce the tariffs on imported cars. The auto industry has always occupied a very important position in the economic development of Russia, providing employment opportunities for about 1.35 million people. It is precisely because of this that Russia has a good reputation for its own car industry, and levying a high tariff policy on imported cars is a typical example. It is understood that the country’s current auto import tariff policy is based on Putin’s order to change the tariff of certain motor vehicles issued in December 2008, and will be implemented from January 12, 2009, tentatively scheduled for 9 months.
As the size of the Russian auto market continued to shrink, the operating conditions of local auto companies did not show much improvement. After the expiry of this temporary policy, the implementation did not stop, but it extended for 9 months. In December 2010, Rakhmanov, director of the automotive industry department of the Russian Ministry of Industry and Trade, stated that the country’s high tariffs on imported vehicles will not decrease until 2014 or 2015.
However, joining the WTO may result in Russia having to adjust this policy. Experts told reporters that according to the regulations, after joining the WTO, Russia should abandon the measures to protect domestic automobile manufacturers by imposing high tariffs on imported cars. Perhaps because of this consideration, Putin made remarks that he will take other measures to protect the domestic automobile industry.
Entry into the WTO will test the high tariff policy of the Russian automotive industry, which greatly limits the export of foreign cars to Russia. In early 2009, after the policy came into effect, many multinational car companies could only use the method of building KD assembly plants in Russia to open up the market. According to a report released by Russia’s statistical agency, 2/3 of foreign cars made in Russia are assembled from imported KD parts.
If Russia succeeds in entering the WTO, the reduction of auto import tariffs will bring more opportunities for multinational car companies. They will seize the opportunity to develop new markets. At the same time, however, Russia's domestic auto industry will be greatly affected. It is reported that the transition period for the reduction of import tariffs of truck manufacturers in the country is very short. In 2012, the current 25% will be reduced to 15%, and in 2015 it will be reduced to 10%. In contrast, the situation of Russian domestic passenger vehicle manufacturers is better. After joining the WTO, the tariff of imported passenger cars in the country needs to be reduced from the current 30% to 15% within 7 years.
Compared with foreign competitors, Russian automobile manufacturers are at a disadvantage in product development, production and marketing. Before the increase in auto import tariffs, the country's imported and domestic car markets performed almost equally. At present, the market share of imported Russian cars has fallen below 30%, especially for imported used cars, and sales have dropped substantially.
The entry into the WTO is the key to Russia’s economic development, and its determination to join the WTO is very firm. It is reported that Russia's application for accession to the WTO has lasted for 17 years and is by far the longest application process. In 2010, the country signed agreements with the United States and the European Union respectively to remove the major obstacles to entry. However, how to protect the development of the domestic automobile industry while fulfilling various commitments after the accession to the WTO is a problem that the Russian government needs to solve. For the country’s auto companies, the days of living in the “greenhouse†may not be long, and improving their competitiveness as soon as possible is fundamental.
Russia's accession to the WTO is conducive to the export of Chinese cars. Russia is a major exporter of Chinese auto companies. According to data from the European Business Association, China's Chery Automobile sales in Russia were 8477 units in the first 11 months of 2010, a year-on-year increase of 95%; Lifan Motors' sales volume was 6765 units, an increase of 157% year-on-year; Great Wall Motor's sales were 3,189 units, an increase of 35% over the same period last year. %.
“Russia’s trade barriers are high, and the tariff for each imported car is even as high as US$5,000. Therefore, it is not realistic to export cars to Russia. It is more favorable to open assembly plants,†said Shang Yugui, deputy general manager of Great Wall Motors. Similarly, Chery Automobile's business in Russia is also dominated by KD assembly plants. Jin Yibo, assistant to the company’s general manager, said: “Chery is now also focusing on the KD assembly business, which is produced by local Russian companies and Chery’s team is responsible for sales.â€
Shang Yugui stated that Russia's accession to the WTO will benefit Chinese auto exports. He said: "After Russia's accession to the WTO, we are expected to gain more opportunities for development. Great Wall Motors will be able to integrate the entire vehicle with Russia and integrate with the local KD assembly business to expand its development space."
Song Jinjin, general manager of China National Heavy Duty Truck International Marketing, also told reporters: "Since two years ago, Chinese car makers were in a difficult position in Russia's market development, the Chinese cars that were sold locally had very difficult to enjoy after-sales service in the past two years. This hurts. The reputation of the Chinese car.After Russia's entry into the WTO, Chinese car companies can more easily enter the Russian market and improve after-sales service."
Russia's Automobile Policy Trends in 2010 On March 8, 2010, Russia officially launched a trade-in replacement program for subsidized vehicles, which stipulates that owners of cars that have been scrapped for more than 10 years (including 10 years) will receive a discount of 50,000 roubles when buying a new car.
On December 21, the Russian Ministry of Economic Affairs and the Ministry of Industry determined new regulations for the assembly of the automobile industry. After four years of signing a joint venture agreement, foreign automakers will receive preferential treatment on imported auto parts in Russia with an annual output of 300,000 vehicles. As an additional bonus, during the entire period of validity of the agreement (8 years), the Russian government allows foreign car manufacturers to produce 5% of the entire vehicle in a loose-packed form. In addition, the government abandoned the idea of ​​setting a minimum investment threshold (previously planned to be 750 million U.S. dollars), but foreign automakers need to negotiate with the government about the model list of cars produced.
On December 24, Russian Prime Minister Vladimir Putin promised that the government will allocate 17 billion rubles for the auto industry next year. Among them, 13.5 billion rubles were allocated for car trade-in projects.
On December 29, Russian media reported that the country’s government will draft a proposal for a plan to purchase cars for trucks and buses. The policy will be introduced in the first quarter of 2011.
Chinese auto companies have confidence in expanding the Russian market. Will Chinese auto companies adjust their market strategies after Russia's entry into the WTO? In this regard, the Deputy General Manager of Great Wall Motor Shang Yugui said: "The key is to see the specific outcome of the negotiations between the Chinese government and the Russian government. If the tariff rate determined is suitable for export, we will export the whole vehicle. As an automotive manufacturer, we will Stay tuned for this."
Assistant manager of Chery Automobile, Jin Yibo, told reporters: “We have no plans to export Russia to Russia, and we will not adjust our market strategy in the short term. After joining the WTO, Russia will reduce tariffs on imported cars and develop Chery’s vehicles locally. It is definitely beneficial."
In the future, the Russian government may adopt technical regulations and other means to protect the domestic auto manufacturing industry. In this regard, Shang Yugui said: “This will not affect Great Wall Motors. Our four vehicles have passed the EU certification and are exported to Italy. In European countries, EU vehicle certification is arguably the most stringent international automotive certification standard, not only recognized by the European Union, but also approved by many countries around the world.We are confident that technical regulations will not affect Great Wall Motor’s exports to Russia. According to Jin Yibo, the Russian government has been increasing its requirements for the certification of imported automotive technology in recent years. "But this has no effect on us. Chery products are produced according to European standards and can meet the requirements of exporting to the Russian market."
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