Tax Causes 8-Fold Drop in Car Import in Russian Far East

VLADIVOSTOK. February 5. VOSTOK-MEDIA – Since the Russian Government imposed prohibitive import duties on old second hand cars on Jan 12th 2009, the number of cars imported from Japan and South Korea through the checkpoints in Russia’s Far East has dropped down eight-fold. The measure was taken to protect domestic car makers and foreign companies assembling cars in Russia.

The data on the results of the protective measures was unveiled by the Head of the Far Eastern Customs Agency Segei Pashko. The report shows 41,787 cars were imported in Russia through the Far Eastern checkpoints in 2009, down from 351,096 in 2008. In addition, there was a 9-fold decrease in truck import, and 4-fold drop in bus import. Primorsky Krai Auto Dealers’ Society stated an estimated 150,000 people have lost their jobs following the imposition of the prohibitive duties.

This year, the Far Eastern Railways will need around 540 rack cars to transport imported second-hand cars, which is 5.5 times less then in 2009,” a spokesman for Far Eastern Transport Service stated.

Those who got used to foreign-made cars are now switching to the so-called “split cars”. Unlike disassembled cars, these cars vehicles are split in two or three parts and welded back together in Russia. People split cars to avoid paying import duty ranging from $3,000 up to $15,000. In addition, these vehicles arrive with forged documents and engine numbers. The cost of a split car is 30%-50% less than that of a typical car.

Rossiyskaya Gazeta daily wrote more than 2,100 domestic cars were transported to the Russian Far East from the western regions of the country during the period from April to December 2009, whereas in January 2010 – 358 home-made cars, which is 160 more than an average number.