The Ministry of Industry and Trade of Russia has begun discussing the terms of updating the investment regime with automakers. The parties are discussing the "30-30-30" formula, which will stimulate investment from those auto concerns that are "under-collecting" localization points in the amount necessary to fully compensate for the recycling fee.
Foreign auto companies will be able to receive partial compensation from the authorities for investments in car production, operating costs for promotion, and localization of components. Thanks to this, investors will be able to recover funds in proportion to the number of points scored for production localization.
The Ministry of Industry and Trade believes that this scheme will encourage Chinese manufacturers to gradually invest in localizing the production of their cars in Russia. Most foreign enterprises currently pay the recycling fee at almost the maximum rate.
Domestic companies KamAZ and AvtoVAZ oppose such incentives for Chinese auto brands, believing that competitors will gain an advantage in the mass market segments. A final decision on the issue will be made before the end of December.
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