Double recycling by 2020 would push the prices of cars up

Double recycling by 2020 would push the prices of cars up

Double recycling by 2020 would push the prices of cars up

25 November 2019

The scrappage fee for passenger cars is increased from 2020 in average by RB 110.7%


Alexander Klimov, photo by the author

Prime Minister Dmitry Medvedev signed a decree on increasing the utilization fee on new cars more than doubled from January 1, 2020. The average recycling fee will increase by RB 110.7%, but in different classes in different ways. So, mini-cars with engine volume up to 1.0 l, the growth will amount to 46.1 per cent in krupnorazmernye – 3.5 l models (mainly premium sedans and SUVs) by 145%, and the most mass model with a working volume of engines in the range of 1.0–2.0 l – at 112,4%. Characteristically, in this segment concentrated the mass of passenger models of domestic and foreign brands assembled in Russia.
The net import of almost in this segment is not competitive due to the utilization of barriers, fully "chosen" (as the fishermen throw the network – ed.) reduced under the agreement with WTO, import tariffs. By the way, on commercial vehicles rates of utilization also increased, and, even on cars with mileage (for example, minibuses and large buses).
However, the car recycling fee on cars upgraded it to compensate for the retiring of import duties, i.e., "maintain the overall level of tariff protection" according to the office of the Vice Prime Minister Dmitry Kozak.

For the first half of this year the share of imported cars amounted to 17% of the market. The prices for car localized Assembly is lowered to the limit due to the fall in demand and automakers just compensate for losses due to imported models. So that doubled the car recycling fee will definitely hurt local producers and importers.
The automobile the automobile industry in Russia has long suffered from spare capacity, which stood at 3 million vehicles a year. But in 2018, sold a total of 1.8 million vehicles, and sales continue to fall in 2019 (for AEB) the seventh month in a row (in October by 2.4%) to 1.4 million Producers of foreign cars in Russia, but only to the signer Speke, receive a large part of the recycling fees back.
In the draft budget for 2020 indexation utilsbora has been laid, so, in 2020, the increase in revenues is estimated at ₽150.2 billion in 2021 – in ₽48 billion in Imported foreign cars in 2020 should bring ₽77.3 billion.
The price of cars and traditionally grow for objective reasons, every new year, but this sharp inflation of the recycling collection will clearly bring to this hop greater share of pumping. However, large car dealers believe that they are able to unload their effluents because of consumer hype in the last two months of this year, reeling from the increased utilsbora. However, there is also the opposite opinion, stating that the consumer market is generally sluggish because of falling real incomes (to say the SSC – ed.) and its prior debt load.

However, almost as always, this trend will not affect the premium market, which is responsible for net imports. However, experts from, for example, "VTB the Capital" believe that even if the hype at the end of this year and will take place in total sales in 2019 he will not pull out and they will show a decline of 2-3%..


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