Finished vehicle imports through the Commercial Port of Vladivostok have dropped 85% since the introduction of the new tariffs, mainly affecting second-hand vehicles brought in from Japan. The new charges, which came in to effect on January 12 this year, have brought unprecedented disruption in Vladivostok and have sparked protests by more than 200,000 people. The charges will remain in effect for the next nine months.
Russia imported more than 333,000 used cars from Japan and South Korea in 2008 and in January of last year it handled 14,259 cars. This dropped to 2,162 last month.
“Since the introduction of higher import duties for used import cars in January 11 to February 11, 2009, the port handled 1,598 cars in comparison with 6,650 cars handled for ten-day period in 2008,” port spokesman Alexy Dovbysh told Automotive Logistics.
More than 12,000 secondhand cars from Japan were brought to Vladivostok in the few days immediately preceding the increase in import duties, pushing the number of vehicles awaiting registration to 3,500. However, no capacity problems arose according to Dovbysh. “The cars delivered prior to the introduction of higher import duties have been cleared through customs without any delay,” he said.
The new customs taxes have risen by 20-80% depending on the age and type of the car. Vehicles less than five years old, for example, have seen a tax increase of 25-30%.
Hundreds of thousands of people are reported to have lost their jobs as a consequence and protestors at the port have attracted the attention of riot police with more than 100 arrests being made in January.
Prime Minister Vladimir Putin said that raising taxes on foreign cars would protect the domestic car industry. Russian vehicle production fell 80% in January compared to the same month a year ago and Russian carmaker AvtoVAZ saw production stoppages in February following component supply problems resulting from payment problems.
In terms of compensation for lost business at the port, managers at Vladivostok are now pursuing projects to attract the transit of used Japanese cars destined for China and Mongolia by rail in containers and rail car-carrier wagons.
Meanwhile, Dovbysh said that representatives of the major Japanese automakers and their Russian traders (dealers) have expressed interest in the transport of new cars to the Russian Federation via Vladivostok.