Auto Recycling Fees and Market Dynamics in Russia: Impacts on Dealers and Buyers

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In a recent interview with the automotive consultancy Hit the Primer, industry expert Yegor Vasiliev discussed a shift in the recycling fee structure for cars offered for resale. The change aims to bolster the domestic market and deter participants in gray market, parallel import schemes. Since August 1, recycling collection rates have risen significantly, increasing by a factor ranging from roughly 1.7 to 3.7 times in some segments.

The most notable jump occurred in October, when the Ministry of Industry and Trade raised the disposal charges for vehicles brought in through intermediary firms under the Eurasian Economic Union. Under the new rules, if an intermediary pays a reduced disposal price, the ultimate buyer could face the full resale price when the vehicle is registered to a legal entity.

Earlier, these intermediary programs sometimes allowed buyers to secure a vehicle at a lower price or to access models that were no longer officially distributed within the country.

Vasiliev cautioned that engaging in such schemes with the government equates to rolling the dice and taking a gamble with little chance of favorable outcomes.

The consequence has been a backlog of unsold vehicles as some owners found themselves unable to cover the elevated scrap taxes, which in certain cases increased by as much as 250 times for specific models. The automotive expert suggested that a temporary moratorium might be a possible response, although there is no clear signal that the state will intervene to assist vehicle owners.

Earlier reports indicated that a buyer in Armenia was involved in a transaction linked to a destruction fee of 1.3 million rubles, underscoring the cross-border complexities of the market. It was also noted that Russia had been experiencing a record monthly pace of car imports prior to recent tightening measures.

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