Ford’s chief executive for Russia operations said he expects sales in the second largest auto market to be increased by the government’s boost for the auto industry.
Ted Cannis, president and CEO of Ford Sollers, which is the automaker’s JV in Russia, said that the new auto scrappage plan, as well as interest loan subsidies for the lower priced cars, will be released by the government in several weeks.
“Very likely, and very soon,” Cannis said. “If they are going to do something, I expect them to do something very soon.”
The government enacted a similar plan in 2008 when sales were affected by the financial crisis. Through a scrappage program, the average age of vehicles in Russia will be lowered, as it is not around 12 years, while interest loan subsidies will help first-time customers and those who want to get rid of their old vehicles.
In 2012 passenger vehicle registrations in Russia reached 2.93 million, an increase of almost 11% from 2011. Analysts predict that sales by the end of the decade would be between 3.5 million and 4.5 million units annually. Sales in Russia are expected to stabilize this year, despite the depressing situation in Europe.
“The European downturn is certainly having a depressing factor,” Cannis said. “But despite the challenges in Europe and the global situation, the auto industry here and the economy here has held remarkably stable.”
Source: The Detroit News