Russia’s Industry and Trade Ministry expects to sign special investment contracts with German carmaker BMW and Korean Hyuindai before the end of 2018, Industry and Trade Minister Denis Manturov told reporters.
Special investment contract is a new mechanism to support foreign and domestic automobile producers. Its key advantage is in guaranteeing standing taxation conditions in exchange for a guarantee of investments to be made by the business.
Hyundai plans production of engines in St. Petersburg in the next three years. As part of this project the signing of a special investment contract is expected. The annual capacity of the production facility will be 150,000 units. This will help the company to increase local manufacturing content to 60%. Hyuindai already has its own plant in St. Petersburg – Hyundai Motor Manufacturing Rus, which produces models of Hyundai Solaris, Hyundai Creta, Kia Rio and Hyundai Creta.
For several years, BMW has been assembling its cars for the Russian market in Kaliningrad (the country’s westernmost region) at the site of the local carmaker Avtotor. However, taking into account the changes in the rules for obtaining discounts and subsidies for automotive companies, the assembly site has become less profitable.