The Industry and Trade Ministry has proposed delaying by two years from 2010 to 2012 the introduction of the Euro-4 fuel standard for cars already being sold in the country, in the state’s latest step to support domestic automakers.
In 2005, the government approved a timeline for the introduction of tougher environmental standards for cars, under which all cars made or sold in Russia after Jan. 1, 2010, must meet the Euro-4 standard.
The ministry has developed amendments to the document spelling out the changes, a copy of which was obtained by Vedomosti. The new version would introduce Euro-4 from Jan. 1, but only for new models. For cars that are already being produced or imported in Russia, the date would be pushed back to the start of 2012.
The proposal has been submitted for approval to the relevant government bodies, and some have already approved the changes, an Industry and Trade Ministry source said.
Switching to Euro-4 could boost prices for the average car by $500 to $1,000, with the rise being most notable for cheaper vehicles, said Igor Korovkin, managing director of the Association of Russian Automakers.
The ministry source said the delay was needed because oil refineries’ deadline for producing fuel no lower than Euro-4 was pushed back to 2012, according to an order signed by Prime Minister Vladimir Putin on Dec. 30. Fuel compliant with the Euro-4 standard currently comprises about 25 percent to 30 percent of Russian production, said Vladimir Bulatnikov, head engineer at the All-Russia Research Institute for Oil Refining.
The country’s automakers couldn’t be happier about the delay. AvtoVAZ now makes Euro-3 compliant vehicles and is planning to switch to Euro-4, but it says the switch doesn’t make sense at the moment because the country does not produce enough high-grade fuel, the company’s press office said.
Spokespeople for GAZ and TagAZ said the majority of their engines are also Euro-3 compliant and that a delayed switch would help them, as well.
Moving to Euro-4 would, in part, require the design of a new engine, said Yevgeny Bogdanov, director of A.T. Kearney’s Russian branch.
The decision was primarily motivated by automakers’ lack of cash, said Yelena Sakhnova, an analyst at VTB Capital.
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