Dmitry Medvedev’s speech:

Good afternoon. Today we’ll discuss a package of measures to promote the development of the auto industry. This is not our first conversation and certainly not the last one. We must meet from time to time and coordinate our positions because there are different trends and market problems.

I read in a newspaper in the morning that our car sales are dropping. We must analyse the reasons for this. Does the market already have enough cars or is this due to the shrinking of the economy (both in this country, as our economic growth rates are unfortunately falling, and in the rest of Europe) or something else.

We are holding this meeting at one of our leading plants, GAZ. I’ve just attended the ceremony to launch a new line of car, the Gazelle Next. This is a happy occasion, and the model is promising.

Modern technology makes it possible to assemble several models on one conveyor belt (people who showed me how this is done spoke about flexibility as a key factor) and meet the needs of consumers. Let me repeat that the new model has good potential.

A few words about the performance of our auto industry. About two million cars, or to be more precise 2,237,000 cars were produced last year, or 12% more than in 2011. The car industry employs about 360,000 people and has created more than a million jobs at related companies and dealerships.

Now a few words about the most important areas. You can express your opinion on other issues if need be.

First, all major global car makers have launched production in the Russian market. For the most part, this is industrial assembly. Procedures for it have been changed since 2011 and by the sixth year of the project no less than 60% of cars must be made in Russia. It is very important that we not limit ourselves to assembly but also import the latest technology and develop our own.

We have chosen to cooperate with leading car manufacturers in production. As for lorry production, we can rely on our own engineering and technical knowhow. This is what we discussed in relation to GAZ, and this engineering and technical knowhow is probably the main thing that we should retain.

Second, I’d like to remind you that in January we endorsed a state programme to 2020 that aims to develop the industry and raise its competitiveness. It includes a sub-programme on the car industry aimed at upgrading R&D on cars and their spare parts and encouraging high-tech production.

We should once again discuss ways to implement this document and the existing problems, including in the context of our accession to the World Trade Organisation.

But one thing I can say is that it is the firm conviction of the Russian authorities, including the Government, that we must and will support this sector, of course, taking into account our international commitments.

This requires systemic efforts based on comprehensive documents, prepared jointly with the business community and experts. There is an opinion that the Strategy for the Development of the Automotive Industry to 2020 needs to be adjusted to reflect our WTO membership and the current situation.

The third point that I wanted to mention, and which we discussed when touring the new GAZ production facility, concerns alternative fuels. This should be a major goal in Russia. To be completely honest, we have done next to nothing in this area, whereas most producers have been carrying out such projects.

There are certain global trends that can’t be ignored. For example, vehicles running on natural gas could be one of the most promising modes of transport. They are twice as fuel efficient as those running on diesel, and 2.5 times more efficient than those running on petrol. And of course, they are incomparably more environmentally friendly in terms of toxic emissions, not to mention some other local issues.

Our country is extremely large, and transport costs will always be higher here than in Europe. The transition to natural gas can change this. And given our large gas reserves, we can and should use this natural competitive advantage of ours. Hopefully, this will also boost the overall competitiveness of our economy.

I have a few other comments, but I will leave them until the end of our meeting.

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Closing remarks by Dmitry Medvedev:

I’ll make a few brief remarks, and then we’ll exchange ideas.

With regard to the use of compressed gas and liquefied natural gas, I believe that we need to issue a Government directive based on the results of today's meeting. I will do this, and include in it all that our colleagues, Mr Kogogin (Sergei Kogogin, General Director of KAMAZ) and Mr Wolf (Siegfried Wolf, Board Chairman of Russian Machines), have said here. We should review the regulatory framework and technical regulations as well as other documents that are in our way, because this is an important issue. I’m not sure about 70 billion cubic metres as the estimated number for domestic use. It would make sense for Gazprom to go over its numbers as well, and if it believes they are realistic, then it would mean that these are fairly large volumes and are significant for Gazprom.

I believe we need to review all issues related to unfair competition, high-sulphur fuel, restrictive measures, and problems associated with importing substandard foreign equipment which does not comply with existing Euro-4 regulations. If the Federal Customs Service is on it already, that would be good. I can also issue a directive to the Ministry of Internal Affairs with regard to the relevant procedure for certificates, which was mentioned by our colleagues. We can also have the Federal Agency for Technical Regulation and Metrology look at this. Perhaps, antimonopoly regulations can be applied here. I would like the antimonopoly agency to look at it also.

We should analyse the proposals on revising mandatory payments, the transport tax and restricted operation of shipping vehicles owned by organisations or private businesses, and buses. I believe that we can study the issue of restricting the use of certain vehicles, because it is a safety issue after all. Privately-owned vehicles are untouchable: let them drive as they do now, but as far as these vehicles go, it’s a matter of public safety.

Let's continue the discussion.

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