Russia: government subsidy for car purchases potentially extended through 2015 image

Once seen as the only European market able to take on the mighty Germany, Russia has been struggling this year because of a faltering economy, rising local currency and numerous tensions caused by political trouble.

With sales already dropping 5% in 2013 after years of double-digit increases, the industry’s observers predict deliveries could slump as much as 14% as consumer confidence fades away. Because of that, the government recently announced a cash-for-clunkers subsidy scheme that would support new vehicle purchases.

Now, the Russian Industry and Trade Ministry announced that the government could decide to keep the incentives for people that trade away their old car into 2015 in a further move to aid the auto industry surpass the current economic downturn.

The ministry statement cited industry minister Denis Manturov and announced the scrappage scheme could be retained for 2015, but didn’t also announce plans to further expand the funds already allocated.

The incentive deal was announced by the government to initially run through the end of the year, pledging 10 billion rubles ($244 million) in funding. According to the Association of European Businesses lobby group, Russia’s sales slumped 20% in September after a 26% drop in August. During the first nine months, deliveries fell 13% to 1.78 million autos.

Via Automotive News Europe