Russians likely to continue buying cheap cars in Belarus - paper

With Minsk relaxed as ever on car imports, Russians look set to continue buying foreign-made cars with low import duties in Belarus, Vedomosti business daily said on Wednesday.

Before the customs union between Russia, Belarus and Kazakhstan became fully operational in July, Russian officials said they would not allow the import of cheap foreign cars from Belarus to Russia.

Individuals can import second-hand cars from Belarus to Russia free of charge on condition that these cars were imported to Belarus before January 1, 2010, according to the Russian Federal Customs Service. Owners of cars that were imported to Belarus after this date have to fork out the remainder of the import duty upon registration in Russia.

But Belarusian car dealers say the sale of second-hand foreign cars in Belarus to Russian buyers has hardly affected Russia's indigenous car industry, since only a few thousand cars were imported to Belarus before 2010.

However, Russians can import new foreign-made cars bought from official dealers in Belarus without any restrictions.

A new Volkswagen Touareg with a 4.8 liter diesel engine costs around 2.9 million rubles ($93,900) from an Atlant-M car dealer in Moscow, and $84,200 in the company's Minsk branch.

Russians remain cautious of buying cars in Belarus, however, because they fear the red tape and corruption they face when they get the car back to Russia, Belarusian dealers say.

"We sense that Russian customers are interested in our cars, but those who decide to buy a car are at risk," a car dealer told Vedomosti. "There has not yet been a single case of a new car bought from a dealer in Belarus being registered in Russia."

Western experts say the outlook for Russia's outdated and worn-out car industry is unpromising, and if Russians are still buying domestic cars it is only because they cannot afford foreign brands.

The Kremlin has moved to assist the ailing industry. It has introduced a multi-billion ruble rescue package to help struggling carmakers including a cash for clunkers scheme that gives people trading in old cars 50,000 rubles towards the purchase of a Russian-made car, and raised import duties on foreign-made cars.

Despite the low price tags, many Russians remain wary of the Ladas and Volgas that have in various forms rolled off production lines for over 30 years.

Even the country's bureaucrats have resisted the allure of a domestic set of wheels. Several feeble attempts to force them into Ladas and Volgas over the past decade have not gone beyond high-flown patriotic words in the parliament.

Instead, the elite have grown even more attached to their jet-black Mercedes and BMWs.

MOSCOW, September 8 (RIA Novosti)


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