Car industry investors to be compensated for possible WTO-related losses
Russian Prime Minister Vladimir Putin says the government will help foreign investors in the country’s car making industry.
“We discussed for a long time during Russia’s WTO accession process how we should do this work in future in order not to let our investors down and keep all our promises, and at the same time to meet WTO car-making requirements,” he said at the meeting with German businessmen.
Putin says compromises have been reached and the government will take part of the burden to meet its obligations to investors. Foreign car makers currently enjoy tax benefits which may be revoked once Russia joins the WTO. This year the government promised tax benefits to several foreign car companies including Ford, Volkswagen and Renault. In exchange these companies agreed to assemble 300,000 cars a year in Russia using mostly locally made components. These benefits are expected to last until 2020 but may be lifted earlier because of Russia’s accession to the WTO.
Russia’s car market is a lure to investors. Car sales grew by 27 percent in the first nine months of the year.