With a visor open - 9 September, 2002

An international investment exhibition of countries belonging to the Asia-Pacific Cooperation (APEC) forum opened in the Russian city of Vladivostok on Monday. At the opening, Russia’s Ministry for Industry, Science and Technology, Ilya Klebanov revealed his true interests of an auto lobbyist.

The minister said, right-wheel cars would be banned for exploitation in Russia, the government was said as working actively on a special law for this purpose. The law is to determine how long right-wheel Toyotas and Hondas will be allowed on the Russian roads. However, the minister didn’t mention exact terms. In his words, main objective of the project is to support the national car producers. Moreover, Ilya Klebanov admitted that he had been a strong activist of raising custom duties for old foreign cars in Russia and actively persuaded Prime Minister Mikhail Kasyanov of the urgent necessity of the measure.
Experts say that the ban of right-wheel foreign cars will  deliver a destructive blow against Russia’s Far East. As of now, the regional traffic control department of Primorye informs as cited by RIA Novosti, over 75% of autos in the region are Japanese cars with a right wheel. The share of Japanese right-wheel cars is even higher in Sakhalin and Kamchatka. Over half of all cars in the Khabarovsk region, and other regions of Russia’s Far East and Siberia are of Japanese production. Before the new customs duties were introduced, up to 1,500 cars were delivered to the ports of Vladivostok from Japan every week. The customs duties made at that over $2 million weekly.

Moreover, the ban will increase unemployment level in the Far East which is already rather high there. It is an open secret that border trade in second-hand Japanese cars is the only source of income for thousands of people in Primorye. It is a real problem for the people to find some other job there. When right-wheel Japanese cars are banned in Russia, hundreds of authorized and non-authorized service centers in Russia’s Far East will face a problem of business liquidation and will have to start adaptation of cars to the left wheel. The latter will demand extra payment and consequently increase the cost of second-hand foreign cars.

The new ban is a problem for Japan as well. Until now, Japan traditionally sent cars which exploitation period approached the critical one to Russia, and the transactions were rather profitable for the Japanese side. Like in all developed countries, Japan has a law according to which car producers are obliged to finance utilization of old cars.

Nikita Nebaluyev

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Author`s name Michael Simpson