Russia Raising Tariffs on Vehicle Imports From U.S.

ST. PETERSBURG – U.S. automakers importing vehicles into Russia can expect significant increases in customs duties soon.

The amount of the planned duties has not been disclosed, but sources close to the Russian government say they may reach 30%-40% of the imported cars’ total cost. Maxim Oreshkin, Russia’s Minister of Economic Development, says the higher duties may take effect in July.

That would represent Russia’s long-awaited response to the latest U.S. sanctions imposed on the country, which affected some leading Russian businessmen and companies, as well as the decision of the U.S. to increase duties on imports of steel and aluminum.

Analysts with the Russian Union of Auto Dealers believe the increased duties mostly will affect imports of niche and premium-segment cars such as Tesla. Most Russian buyers of premium models are relatively insensitive to price, however, which means the higher duties probably will not significantly impact the vehicles’ sales or volume of imports into the country.

According to Russian Ministry of Industry and Trade data, 218,293 new passenger cars were imported into Russia last year, of which about 20,000 were U.S.-built. Major U.S. import brands include Chevrolet, Cadillac and Dodge. Imports’ overall share of the market is estimated at 14.3%.

U.S. automakers General Motors and Ford conduct local manufacturing in Russia.

GM suspended operations at its St. Petersburg plant in 2015, but the automaker continues building the Chevrolet Niva mini-SUV in a joint venture with Russian manufacturer AvtoVAZ.

Ford’s JV with Russian manufacturer Sollers produces vehicles at three local factories. Earlier this year the automakers also localized engine production in Russia.

Ford says 99% of the cars it sells in Russia are produced locally, so higher customs duties would not negatively affect its Russian business. GM Russia representatives were not available for comment.