<P> The value of the Russian market grew at a brisk pace: 14% in 2005, 36% in 2006 and 67% in 2007--making it the world's fastest growing automotive market by 2008 . Foreign companies started flocking to enter Russia in the 2000s, seeing it as a local production location and export powerhouse . Russia's labour, material and energy costs were only 1 / 6 compared to those in Western Europe . </P> <P> To boost the market share of locally produced vehicles, the Russian government implemented several protectionist measures and launched programs to attract foreign producers into the country . In late 2005, the Russian leadership enacted legislation to create special economic zones (SEZ) with the aim of encouraging investments by foreign automotive companies . The benefits of operating in the special economic zones include tax allowances, exemption from asset and land taxes and protection against changes in the tax regime . Some regions also provide extensive support for large investors (over $100 million .) These include Saint Petersburg / Leningrad Oblast (Toyota, GM, Nissan) and Kaluga Oblast (VW). Kaluga has been especially successful in attracting foreign companies, as has been Kaliningrad Oblast . </P> <P> Russia's automotive industry was hit hard by the late 2000s recession . Production of passenger cars dropped from 1,470,000 units in 2008 to just 597,000 units in 2009 . Lorry production fell from 256,000 to 91,000 in the same period . </P> <P> In late 2008, the Russian government introduced protectionist measures, worth $5 billion, to improve the situation in the industry . This included $2 billion of bailouts for troubled companies and $3 billion of credits for buyers of Russian cars . Prime minister Vladimir Putin described the move as vital in order to save jobs . The tariffs for imported foreign cars and trucks were increased to a minimum of 50% and go up to 100% . The tariffs are linked to the engine size of the vehicle . The increased duties led to protests in Russian cities, most notably in Vladivostok, where the importation of Japanese cars is an important sector of the city's economy . To compensate for the losses of the Vladivostok businesses, Prime Minister Putin ordered the car manufacturing company Sollers to move one of its factories from Moscow to Vladivostok . The move was completed in 2009, and the factory now employs about 700 locals . It was planned to produce 13,200 cars in Vladivostok in 2010 . </P>

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