Car import ban scenarios

Experts from Roland Berger Strategy Consultants insisted in an updated market reportThursday that any decision by Russia to impose sanctions on car imports from Europe and the US could undermine the national economy even more.

It noted that Russia's automotive market kept faltering, contracting by 12 percent in the first eight months of 2014 and showing monthly drops of almost 25 percent in July and August.

The study said the economic downturn and political uncertainty had kept revenues in the Russian vehicle market on a downward trend for months, with no sign of recovery any time soon and harsher sanctions imposed by the West adding to the pressure.

Weighing the options

The consultants said that if Moscow were to impose an embargo on all car imports from the EU and the US, this scenario would see almost 110,000 fewer cars being sold on the Russian market in 2015, entailing drastically falling revenue from sales taxes and import duties.

"Our calculations indicate that Russia would lose around 1.4 billion euros ($1.8 billion) in the coming 12 months," Roland Berger partner Uwe Kumm said in a statement, adding that the only winners of such a complete ban would be Asian carmakers from China and South Korea who would be able to greatly expand their market share across Russia.

But the study also points out that Russia could impose less drastic measures, hurting the West, but seeing itself profit in the process. In a scenario involving a 10 percent hike in import duties for European and US original equipment makers (OEMs), increased revenue from duties would wash an extra 55 million euros into Russian state coffers, it claimed.

Western auto makers for their part would have to invest much more in their production facilities on the ground to circumvent higher import duties, the report pointed out.