A report in The Moscow Times says that new customs rules may cost Ford about US$25m in tariffs on imported car parts over the next three months.
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Earlier this week, officials at the Federal Customs Service said they had revoked the duty-free status on Ford Focus models being assembled at Ford’s factory near St. Petersburg, citing a contract requiring that 40% of the factory’s car parts be produced in Russia this year.
Ford, the first foreign carmaker to build its own factory in Russia, set up shop under the condition that by 2007, 50% of its parts would be produced in Russia.
Ford Russia president Henrik Nenzen said the factory would reach the target of 40% by late August — a deadline he said had been agreed with the Economic Development and Trade Ministry.
But following a change in customs regulations, the carmaker will have to pay US$2,500 per car in duties before it can prove it that it has reached 40% localisation at the end of August, Nenzen said.
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By GlobalDataThe factory will produce about 10,000 cars in that time, he said.
Ford will try to get a refund on the $25 million, and will not increase its prices in the meantime, Nenzen said.
