According to Yuri Ladygin, head of the Customs Service’s Far East Department, amendments to Russia’s customs regulations require all cars imported into the country after January 1st – whether new or used – to be equipped with the telematics-based navigation and communication system, which is designed to cut emergency response times by automatically transmitting details of any accident including vehicle location, time and level of impact.
The vehicles that have been blocked were already in transit under import permits issued last year, before the new rules came into effect.
Ladygin did not disclose details of the vehicles held, saying only that based on current legislation, the Federal Customs Service did not have a scheme in place for dealing with them.
Most carmakers have already confirmed they will equip cars bound for Russia with Era-Glonass, including Toyota, General Motors, Nissan, Infiniti, Mercedes-Benz, Rolls-Royce and Subaru. A number, however, including Audi and BMW, have said they will cut the range of cars imported into Russia instead.
According to Russia’s Association of Automotive Dealers (ROAD), the new legislation has come into force three years earlier than most carmakers were expecting. It puts an additional burden on inbound logistics and will hit sales of new cars in the country, warned Andrey Petrenko, ROAD’s vice-president.
Petrenko said the requirement to fit all finished vehicles with the Era-Glonass system would also contribute to a further, 5-10% decline in both imports and sales of new cars. Legislation is already estimated to cost Russia’s automotive industry around 30 billion roubles ($500m) a year.
ROAD spokesperson Vyacheslav Zhigalov added that the measure had come into force at a difficult time for Russia's economy and it was not clear how it tallied with the Russian government’s promise to keep supporting the automotive industry.
Russian automotive analyst, Sergey Aslanyan, said there was a monopoly on certification of finished vehicles, with only two centres in the country issuing certificates under a non-transparent pricing model. At the moment, obtaining certification for the fitment of the Era-Glonass system costs 200m-300m roubles ($3.3m-5m) per model, he pointed out. Vehicle makers also face a further cost of about €100 ($107) per vehicle for the equipment.
Aslanyan said the new requirement would reduce the range of premium cars in the country and significantly raise prices in the budget segment, as carmakers sought to recoup the additional costs.
Several Russian news sources have suggested the new requirement has forced Alfa-Romeo to stop importing cars to Russia altogether, despite substantial sales growth there of 127% last year. So far, the carmaker has not confirmed this, however.