The State Duma approved in the first reading the extension of the SPIC in the automotive industry until 2033

The State Duma approved in the first reading a bill allowing to extend the term of special investment contracts (SPIC) in the automotive industry until December 31, 2033. The SPIC initially provides tax incentives in exchange for investment, but automakers signed contracts to gain access to scrappage compensation through so-called industrial subsidies. Initially, SPICs were concluded for ten years. All key players in the industry have contracts, including AvtoVAZ, KamAZ, Sollers and the GAZ group.

Now, as stated in the explanatory note, the automakers are faced with “conditions that do not allow them to fully fulfill their obligations to master critical technological operations and achieve the appropriate level of product localization, calculated in points, by the end of the SPIC.

In 2022, after the outbreak of hostilities in Ukraine, the production of foreign automakers in the Russian Federation was suspended, and some domestic players greatly reduced the lineup. This was due, among other things, to the need to rebuild supply chains and look for new suppliers against the backdrop of sanctions prohibiting the supply of components to the Russian Federation. For example, more than €300 from the EU.

Olga Nikitina