MOSCOW — A planned tax hike on imported cars is roiling Russia, whose government is caught between the populist demands of middle-class protesters and a crumbling automobile industry.
The dozens of demonstrations that have cropped up across Russia in recent weeks haven't been particularly big. However, they have been significant as the first notable show of widespread dissent in the near-decade since Prime Minister Vladimir Putin cemented his hold on power.
Organizers say they will keep up the pressure unless the government reverses its decision to raise taxes on imported automobiles.
The tariff, which takes effect in January, has pitted an ailing domestic auto industry against working people, especially in Russia's eastern flank, who have come to rely upon the import of inexpensive Japanese cars for transportation and employment.
Underscoring the depth of the problem, the country's biggest carmaker on Monday announced plans to suspend production until early February. All three of Russia's largest auto companies have turned to the state for help in recent months as car sales plummeted.
AvtoVAZ, maker of Lada cars, was forced to temporarily halt production because the supply of parts had been interrupted, Russian media reported. The company did not answer questions sent Monday by e-mail.
In the past, the country was flush enough with oil revenue that the government could avoid this kind of disruption. But with unemployment rising rapidly and car sales plunging, the country's leaders have been forced to prioritize.
So far, Putin appears determined to save the domestic auto industry. Over the weekend, amid the protests, he promised subsidized loans to motorists willing to buy Russian. He also floated the idea of offering "state support" to foreign carmakers operating plants in Russia.
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Jobs in the balance
Infuriated drivers say it's not enough. In Russia's eastern lands, an influx of cheap cars from Japan has spawned an explosion in car ownership -- and created jobs for importers, car parts wholesalers and mechanics who helped shore up the region as industry slumped.
The tax hike, which will be determined for each vehicle based on a complicated formula, will drastically increase the cost of foreign cars and trucks. Vehicles older than 5 years will be slapped with a duty of at least 70%, making their importation unprofitable.
