"This suggestion will be discussed in detail," the source of the agency said. "In December it must be put before the government."
Without elaborating, the source said it was a matter of granting tax breaks on some of the components meant for industrial assembly.
"There are components that will never be manufactured in Russia, and there are ones that are produced or may be produced in Russia. A kind of balance must be found," the source said.
Earlier, Alexei Kaulbars, director of the department for state regulation of foreign trade and customs, told reporters that the possibility was being considered of reactivating the 1998 presidential decree and government decision about the so-called "free warehouse", which offers a preferential customs regime for components. This measure will help to attract investments into the Russian motor industry, Kaulbars remarked.
In 1998, Renault set up a joint venture in Russia on a parity basis with the Moscow government - OAO Avtoframos. In 2004, Renault boosted its stake in Avtoframos capital to 76%. The Moscow government kept 24%.
Avtoframos acts as a commercial and production agent to manufacture and sell Renault cars in Russia. By the end of 2008, the company is planning to increase sales in Russia to 100,000 units.
In 2003, Renault sold over 11,000 cars in Russia, or 36.2% more than in 2002. In the first-half of 2004, it sold 7,311 vehicles (or 38% more than in the same period of 2003).
At present the Moscow plant is assembling Renault Symbol cars, and also building new capacities for launching a new model -the Renault Logan. The Logan is scheduled to go on-line in the second quarter of 2005. Towards the end of 2006, it is planned to reach an initial capacity of 60,000 units a year.
Renault is to invest $250 million in siting and developing production facilities, which, according to company specialists, constitutes the biggest investment in Russia's motor sector.
Logans will be assembled in Russia from assembly kits and individual mechanical subassemblies. Later on, it is contemplated to integrate the plant into the local economy and gradually to raise the manufacture of stamped components in Russia. The components will be supplied by Russia's ZIL plant.
