KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Russia is set to increase taxes on imported cars starting in 2025 by doubling the scrappage fees that all car producers must pay, as outlined in draft budget documents released on Monday. This move is part of a broader strategy to enhance state support for locally manufactured vehicles.
Since February 2022, Russia's automotive market has undergone significant changes, with Western carmakers withdrawing and Chinese manufacturers stepping in to fill the void. The draft budget indicates that Russia anticipates nearly doubling its revenues from car recycling in 2025, projecting an increase from 1.08 trillion roubles to 2.01 trillion roubles.
Increased Scrappage Fees and Support for Domestic Production
The scrappage fees for imported vehicles are expected to rise to 1.14 trillion roubles next year, up from 680 billion roubles. For domestically produced cars, the fees will increase to 871.5 billion roubles from nearly 400 billion roubles this year. Both domestic manufacturers and importers are mandated to pay these scrappage fees to cover future state costs associated with vehicle disposal.
While these increased costs will likely make imported cars more expensive relative to their local counterparts, the government plans to offset these expenses through enhanced subsidies for domestically produced vehicles. This approach aims to mitigate part of the production costs for local manufacturers.
Implications for Chinese Automakers
As a result of these changes, imported vehicles may see a price hike, potentially prompting Chinese carmakers to consider relocating some production to Russia to maintain their competitiveness in the market.
In 2022, Russia's domestic car production plummeted to a post-Soviet low, driven by the abrupt exit of Western automakers from the country. The planned measures reflect an effort by the Russian government to stabilize and revitalize its automotive industry amidst ongoing geopolitical challenges.
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