Major automakers have proposed raising the vehicle recycling fee and pegging it to engine power, rather than just engine volume.
Market participants believe this change will help combat ‘gray’ imports and correct a social imbalance, as buyers currently pay the same fee for the future disposal of a luxury BMW as they do for a budget-friendly Changan. Representatives of the Association of Russian Automakers have already sent their proposals to the Ministry of Industry and Trade.
The automakers’ initiative to increase the vehicle scrappage fee while tying it to engine power looks quite logical and meets the goals of state policy in the automotive industry, believes Alexei Ivanov, owner of the Alliance Trucks chain of commercial vehicle dealerships.
A revised system would redistribute the tax burden more fairly across different vehicle categories. Currently, owners of luxury and budget cars pay the same fee, which indeed is socially unbalanced.
Linking the rate to engine power could also help combat gray imports and stimulate the purchase of domestic cars. For Russian manufacturers like Avtovaz and Kamaz, this creates a more level competitive playing field, allowing them to strengthen their market position and expand production.
“In addition, this tool supports the government’s general strategy to modernize the vehicle fleet and develop safe and environmentally friendly transport solutions. From a social policy perspective, a more equitable distribution of fees will reduce the burden on owners of budget cars and provide additional funds to support the industry and infrastructure, which meets the interests of the whole nation,” Ivanov concluded.