Another related news from China Car Times:
It seems the Russians are getting very, very protectionist about their car industry, which seems to make nothing but terrible cars (except the Lada Niva). A few weeks ago we reported that Russia had ‘dropped the bomb’ on Chinese car makers, it seems the mustachioed, fur hat wearing policy makers in Moscow have gone a step further.
Chinese car makers often export cars to Russia using a CKD format (complete knock down) this means the factory in China gets all the right pieces together and ships them to a Russian factory where, the workers get the worlds hardest Airfix model to build. The Russian government originally charged a 15% tax on these CKD kits, as they are not a full car, but not individual pieces either.
The Russian government hauled Cherys partner in Russia, AVTOTOR, into court the other week charged with failure to pay an 80million USD tax bill. AVTOTOR claims the tax bill should be at 15% per CKD kit, but the Russian government now says the CKD kits are to be taxed at 25%, as the Chinese are essentially just sending ’screwdriver’ kits over the border, basically the cars just need putting together with a screwdriver.
To qualify for the lower 15% tax, Chinese manufacturers must send their cars unwelded, and without body paints, to further complicate matters Chinese manufacturers must have a license to operate a car factory (a car factory being able to spray cars, and weld them) n Russia, but of course they cant get that license.
Motoring industry sorts believe that Chinese car makers will be forced to quit the Russian market, as the cost of doing business is soaring.