Putin threatens customs duty hike for foreign car imports

30th August 2010, Comments 0 comments

Russian Prime Minister Vladimir Putin on Monday raised the prospect of higher customs duty on foreign-made cars to protect the the country's struggling local auto industry.

While Russia will not immediately raise duty, it plans a hike in coming years to encourage foreign carmakers to set up factories in the country, Putin said in televised comments without giving a concrete launch date.

"We will start to increase the rates gradually: first on the import of secondhand cars, then we will gradually start to raise customs duty on new cars too," Putin told the Rossiya 24 channel broadcast on Monday.

"We are not members of the WTO (World Trade Organisation). We can do it if we want," he added.

In 2008 Russia announced a controversial rise in the tariffs on imported secondhand cars, a move that provoked protests in Vladivostok where consumers have long preferred models from neighbouring Japan.

Putin gave the interview while at the wheel of a canary-yellow Lada, which he took for a test drive on a new 2,000-kilometre highway linking the Far Eastern city of Khabarovsk and Chita in Siberia.

Accompanied by a motorcade, he said that the Lada makers -- Russia's top but struggling carmaker Avtovaz -- asked him to test the vehicle but conceded that he would not drive the boxy car all the way himself.

Putin has backed massive investment in Avtovaz and in March launched a cash-for-clunkers scheme to help prop up the domestic market.

© 2010 AFP

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