Min: Russian car market to fall only 24% with govt support in ‘15

GORKI, Moscow Region, Mar 23 (PRIME) -- Russian government’s measures to support the car industry will significantly slow down the market’s decrease, and it will fall only by 24% in 2015, Industry and Trade Minister Denis Manturov told reporters Monday.

“If we adopt no measures of support, the market will fall by 50%, but considering the measures that were launched at the beginning of the year, and those that have been adopted today, the market will fall only by about 24% on the year,” Manturov said.

Prime Minister Dmitry Medvedev approved a 25 billion ruble support program for the car industry. The government will also allocate about 11 billion to federal authorities on state procurements of cars in 2015, he said.

The ministry is also discussing subsidies for car loans, and they will be tied to the central bank’s key rate and most likely will compensate about 70% of the rate, he said.

No measures of separately supporting car maker AvtoVAZ have been adopted, as no significant decrease of staff after the 2008 crisis is planned at the company, Manturov added.

Every foreign car producer, including Chinese companies, have a chance to localize production in Russia, as the government does not impose any restrictions on new plants and production lines. “We count on foreign producers to come to our market and organize localization, organize new production of their components for acting assembly lines,” he said.

On March 19, Medvedev also signed a ruling to prolong a car scrappage program to 2015. During the previous 10 billion ruble program in September–December 2014, car makers provided a discount of 40,000–350,000 rubles for the purchase of a new car depending on model and on whether it was a trade in. A total of 188,178 cars were sold under the program.

Later, the government decided to allocate 10 billion rubles more on the program for 2014 and 2015, and on March 2 Deputy Prime Minister Arkady Dvorkovich said another 10 billion rubles may be allocated in April.

(60.0341 rubles – U.S. $1)

End