Russia: Lada sales modestly rise following government subsidy program introduction image

The country’s affordable Lada brand has enjoyed a slight return to positive sales, most likely owing the situation to the introduction of a government subsidy scheme designed to counter the effects of Western sanctions.

The brand is owned by Russia’s top carmaker AvtoVAZ, which said Lada sales modestly rose by 5% last month, with the overall domestic deliveries climbing 1% – this is the first increase recorded by the country’s auto market in 19 months. Russian buyers have reoriented to foreign brands since the fall of Communism, but the market began to slide last year after continuous double-digit increases – the local currency has lost almost a quarter of its value against the dollar this year alone. The economy has been further pushed to a near recession after Russia has been sanctioned by the western countries for its implication in the political crisis in Ukraine.

To counter the effects of rising sanctions and the lower consumer confidence, the state has resorted to the introduction of a scrappage scheme that gives buyers incentives if they exchange their old car for a new one. Back in August the government pledged 10 billion rubles for the program designed to run until the beginning of 2015 – expecting it to subsidy the sales of more than 170,000 passenger and light commercial vehicles, buses and trucks.

Via Automotive News Europe