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Russia's Leningrad Region authorities want to halve property tax for Ford plant

July 21, 2015, 12:54 UTC+3 ST. PETERSBURG

The Ford plant has a production capacity of over 160,000 cars a year and employs about 1,500 people

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© TASS/Piotr Kovalev

ST. PETERSBURG, July 21. /TASS/. Acting Governor of the Leningrad Region in northwest Russia Alexander Drozdenko has suggested reducing the property tax for car producers by 50% in the next three years. The region’s sole auto producer Ford will be able to use this privilege so far.

The regional authorities believe the new state support measures will help "compensate for a part of expenses on launching a renewed model range of cars into production" and "offer consumers competitive prices for cars produced in the Leningrad Region."

The document prepared by the regional authorities cites expert estimates, which suggest that the Russian automobile market will be hit by a recession in the next two years.

"The recovery of positive market trends and, naturally, the growth of production volumes can be expected in 2016. At the same time, the growth rates in 2016-2017 will not exceed 3-5% The growth acceleration is expected only after 2017," the document says.

Currently, only the Ford plant owned by US-based Ford Motor Company and the Russian Group Sollers assembles cars in the Leningrad Region. The plant was built in 2002 and rolls out Ford Mondeo and Ford Focus models, using full-cycle technologies.

The Ford plant has a production capacity of over 160,000 cars a year and employs about 1,500 people.

The Ford plant in the Leningrad Region imports some components for auto production and, following the ruble’s devaluation in late 2014 and a slump in sales volumes on the Russian market, was forced to switch to one-shift work and introduce an incomplete working week.

A total of 700 workers were dismissed upon agreement between the parties. This measure sparked workers’ strikes who demanded wage increases and job guarantees.

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