Russian suppliers are urging Moscow to consider equally the component sector in terms of State subsidies on offer.

The Kremlin is making RUB50bn (US$729m) available this year for the automotive industry to help it weather the current horrendous market conditions, which saw vehicle sales plunge 36% last year alone, but suppliers are also putting forward their case for national support.

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"We tell the [Russian] government they need to support," GAZ Group Autocomponents division director, Kiril Epshteyn told just-auto on the sidelines of this week's Russian Automotive Forum (RAF) in Moscow. "Decree 166 [mandating local content] is fully functional – localisation rate should be 60%.

"We have [also] spoken repeatedly there should be low interest rate loans provided. We need special tariffs for auto component producers and compensation for R&D efforts."

For his part, first deputy general director, Ulyanovsk Region Development, Igor Ryabikov, said there were a range of government measures available to attract new companies, such as tax breaks, special economic zones, VAT and customs duty free arrangements.

"From the viewpoint of support from the State, what they are doing, they have done everything they could," said Ryabikov.

Russian government officials told just-auto in Moscow this week the level of automotive subsidy would continue for 2016 and that it was the first such incentive granted by Prime Minister, Dimitry Medvedev, a move underpinned by consultants, KPMG.

"We held a meeting this week with the Russian government to talk about subsidies and interest rates," said KPMG senior manager, tax & legal, Natalia Nikitina. "Maybe the rates are not so attractive. One of the measures of the Russian government is to subsidise interest rates.

"The fact it [Russian government] provides support, I think it is right, the right action. In the current situation, we need support."

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