New height: what can lead to a change in the rules for calculating recycling
In Russia, the rules for calculating the recycling fee may change. Representatives of the Association of Automobile Manufacturers of Russia approached the Ministry of Industry and Trade with an initiative suggesting that when determining the amount of this fee, not only the engine volume but also its power should be taken into account. Izvestia found out how this will affect the cost of cars and the car market as a whole.
You're giving me power!
The Association of Automobile Manufacturers of Russia (UAR) proposes to adjust the methodology for calculating scrap collection by establishing an additional calculation criterion related to engine power. The corresponding letter (a copy is available to Izvestia), signed by Sergey Kogogin, Chairman of the Board of the Association of the UAR, CEO of KamAZ PJSC, Vadim Sorokin, President of the GAZ Group, and Nikolai Sobolev, CEO of Sollers PJSC, was sent to the Ministry of Industry and Trade of the Russian Federation.
The letter notes that, given the development of technology in the automotive industry, the existing scheme, in which the size of the waste is determined depending on the type of engine and its volume, is losing its relevance. The UAR noted that turbocharged engines, "which have become widespread, including in Chinese cars, have higher power with a small volume (on average 1.5 liters)." In addition, the organization emphasized, the number of hybrid cars is growing, the designs of which provide for internal combustion engines with a small volume. This leads to the fact that cars of radically different price categories are subject to the same amount of recycling fee if they have a relatively small engine capacity, according to the UAR.
"The budget sedan Changan Alsvin with a recommended retail price of 1.85 million rubles and an engine capacity of 1.48 liters (98 hp) is subject to a recycling fee of 677.4 thousand rubles. The same amount of disposal fee is provided for a BMW X3 car with a recommended retail price of 8 million rubles and an engine capacity of 1.99 liters (255 hp) and for a sequential hybrid Aito M9 with a recommended retail price of 10 million rubles and a capacity of 496 hp," the letter says.
As a result, according to the UAR, the recycling calculation system has ceased to provide "social differentiation", in which a more significant amount of recycling fee is paid for a more powerful and expensive car, the UAR notes.
Preferential recycling rates for individual importers (3.4 thousand rubles for the import of a new car and 5.2 thousand rubles for the import of a car with a mileage older than three years), combined with the current engine volume calculation system, led to a significant increase in the share of imports for physicists, the organization notes. According to the UAR, this year the share of such cars in the total import structure is already 50-70%, depending on the month. Thus, according to the association, unscrupulous business has moved into a gray area.
"In fact, the car is imported into Russia by a business structure, but at a discounted rate directly to an individual who pays remuneration to an intermediary in cash," the UAR said in a statement.
The Ministry of Industry and Trade confirmed to Izvestia the receipt of the letter from the UAR, saying that it "will be considered in due course."
For the sake of justice
The UAR initiative is overdue and logical, according to Irina Frank, CEO of Frank Auto. According to her, the proposal to change the method of calculating the recycling fee from engine volume to power is absolutely justified from a technical point of view.
— In the era of the dominance of atmospheric gasoline engines, the volume directly and fairly accurately correlated with the power and price of the car. Big SUV — big engine — high price. Today, technology has changed everything. A one-and-a-half-liter turbocharged engine can produce power comparable to previous generations of three-liter engines, and hybrid installations completely erase this connection. The current system, in fact, fines honest importers and creates a huge temptation for gray imports of premium models," Irina Frank told Izvestia.
The change in the principle of waste collection calculation will certainly have a significant impact on the entire market structure, the expert notes. For new cars, especially in the premium segment and among powerful hybrids, we can expect a significant increase in prices upon official import, as their price advantage will disappear. For budget and medium-budget new models with relatively low power, there may be no negative consequences, and their positions will even strengthen, Irina Frank believes.
— As for the used car market, the effect will be most noticeable here. Gray imports of used powerful foreign cars, such as SUVs and sports sedans, will sharply lose their economic attractiveness and will practically disappear. This, in turn, may lead to a temporary increase in the cost of already imported and cleared vehicles of this class, as the supply for them will cease to replenish, " predicts CEO Frank Auto.
If the UAR initiative is adopted, gray imports of new and used cars will rise in price by the amount of the difference between commercial "scrap" and preferential, said Renat Tyukteev, Deputy General Director for New Car Sales at Avilon AG. According to his forecasts, prices will rise by 800 thousand rubles or more, depending on the capacity of the car.
— We assess the initiative to change the import rules as timely. Today, sales of cars with preferential recycling are carried out in a "conveyor" way: it is enough to go to classifieds and choose a car with a preferential tax right away. This turns the idea upside down, according to which the preferential fee is carried out upon self-purchase and delivery of a car by a private individual. This has turned into a tax avoidance scheme for commercial entities," said Renat Tyukteev.
Rise in price, confirmed by practice
Changing the recycling fee will inevitably lead to higher car prices: this has already been proven by the experience of August 2023, October 2024 and January 2025, Maxim Kadakov, editor-in-chief of Za Rulem magazine, recalled. The introduction of an additional criterion for calculating rates and the next stage of indexing from January 1, 2026 will affect the total cost of cars, he stressed. In his opinion, the initiative to take into account not only the engine volume, but also its power is "a long-term effort to clear the way for new domestic car models."
— The appearance of cars of the revived Volga brand, which will be equipped with turbo engines, has already been announced next year. AvtoVAZ will also have models with turbocharged engines. The Moskvich is expanding its range with models with such engines. In order for these projects to be in demand, it is quite logical to introduce additional restrictions on the import of foreign competitors. That is why the additional engine power factor, as follows from the letter of the UAR, is apparently planned to be distributed both to importers of "physicists" and to legal entities. This is a kind of initiative from below," Maxim Kadakov told Izvestia.
More recently, Anton Alikhanov, the head of the Ministry of Industry and Trade, has already announced possible changes in the rules for calculating scrap related to engine power, said Igor Morzharetto, partner of the Autostat analytical agency. Then it was a question of introducing a limit of 160 hp for preferential rates of this fee for individuals, he recalled. If the UAR proposals are accepted, it will not be possible to avoid an increase in car prices, the expert warns.
— There's no need to guess: both new and used cars will become more expensive. In anticipation of this, there will be a sharp surge in car sales, which will inevitably be followed by a very serious drop.: We have already seen this at the end of last year and the beginning of this year. Currently, the Russian car market is very weak and has barely begun to show minimal prerequisites for growth. In the current situation, any attempts to change the recycling can be fatal for the car market and finally bring it down," Igor Morzharetto told Izvestia.
The budget requires money
The introduction of the capacity parameter when calculating the size of the scrap collection is an attempt to compensate for a significant decrease in budget revenues associated with a reduction in the import of cars by importers of legal entities, said Anton Shaparin, vice President of the National Automobile Union (NAS).
— We see that the number of such machines has been steadily decreasing lately. At the same time, the share of "physicists" in imports is only growing — now about half of the total number of such cars are imported, while at the beginning of the year they were less than 15%. The vast majority of models, both new and used, which are imported through alternative channels, are issued through the CCC to a specific buyer. Due to this, such cars will turn out to be cheaper than those that were officially imported by a legal entity under the OTS," he explained.
If the UAR proposals are approved, the cost of such vehicles will inevitably rise, the NAS Vice president warns. Residents of the Far East and Eastern Siberia, where there is a high proportion of low-capacity, but at the same time quite powerful models, will suffer the most from this, he predicts.
— In these regions, the main demand has long been for imported cars (most often used), which are mostly imported for personal use. An increase in waste collection on them, and therefore their rise in price, can lead to a serious increase in social tension in the east of the country," notes Anton Shaparin.
The domestic automotive industry, of course, needs to be protected, including through tariff and duty regulation measures, which is a normal global practice, the NAS Vice President emphasizes. However, such protection should apply not to all models without exception, but to those groups that are produced by Russian car factories.
— If we do not have our own engines for passenger cars with a capacity of 150 hp, then why limit their import and limit the choice of people? The same applies to body types or car classes," says Anton Shaparin.
"Grayness" is questionable
In theory, the introduction of any new restrictions and prohibitions may lead to an increase in the number of schemes that allow circumventing them, the NAS vice president believes, since "a couple dozen people are thinking about restrictions, and hundreds of thousands are thinking about how to circumvent them." However, in the case of calculating the recycling taking into account the engine power, such a development is unlikely, he clarifies.
— Unlike the ecological class "drawn" in the SBKTS or the reduced customs value of the car in the declaration, it is very difficult to underestimate the engine power — it is very easy and quickly checked, — said Anton Shaparin.
The editor-in-chief of Za Rulem is skeptical about the possibility of increasing various gray schemes related to underestimating the capacity of imported cars in order to reduce the size of the recycling collection. Since the engine's performance can be easily determined by the VIN number of the car, such schemes are already "moving into the category of scams that threaten, among other things, criminal prosecution," he noted.
There is certainly a possibility of attempts to find a new loophole, but the success and mass scale of such schemes are questionable, said Nikita Kolesnikov, a representative of the Japanese export company HSS in the Russian Federation.
— Power is a parameter that is strictly prescribed in official international certificates and catalogs of manufacturers. The customs services will be guided by this data. An attempt to underestimate the capacity will be regarded as direct fraud with appropriate legal consequences. Of course, the temptation to underestimate the capacity of customs clearance from unscrupulous importers will remain, but it will be extremely difficult and risky to implement such schemes, which will not allow them to become widespread, he told Izvestia.
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