Money Matters - Simplified

Russia invites automakers with tariffs

Moscow -- Prime Minister Vladimir Putin said customs tariffs on automobiles would be raised, calling it encouragement for foreign companies to set up shop in Russia.

"We do not want to undermine your (carmakers) business in Russia. Come to us and set up production here," the Russian news agency RIA Novosti quoted Putin as saying Tuesday.

By raising tariffs, Russia hopes to discourage imports, which would, in theory, encourage companies to build production facilities in Russia.

Putin said tariffs could be raised, because, "after all, members of the World Trade Organization … can afford it," he said.

Currently, while several large automakers have built production facilities in Russia, the country still imports more cars than it produces. January through June, automakers produced 157,561 vehicles in the country. By comparison, Russia imported 251,300 cars in the same six month period.

Copyright 2010 United Press International, Inc. (UPI).

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