Russian government to revive car scrappage scheme image

In an all out effort to rescue an automotive industry that has been skydiving lately, the Russian government will pledge 10 billion rubles (207 million euros) to reintroduce an incentive program.

The long-awaited support for the industry comes in the form of the traditional scrappage scheme, subsidizing the purchase of new vehicles throughout the year – the program starts next week and lasts until the beginning of 2015. According to the industry minister Denis Manturov, the incentives should support the purchase of at least 170,000 passenger and light commercial vehicles, buses and trucks.

The program addresses buyers of new passenger cars with at least 40,000 rubles (825 euros) after they scrap their older vehicle, while the commercial vehicles are eligible for discounts starting at 350,000 rubles. The new program is mirroring older state-backed scrappage schemes, the latest in Russia put in place in 2010 – it allowed buyers to get rid of their cars that were at least a decade old.

According to the Association of European Businesses (AEB) lobby group, car sales in Russia tumbled 23% to 180,767 units in July, while seven months figures were down 10% to 1.4 million autos. The AEB also lowered its full year forecast from a slow 1.6% decline to a sharp 12 or 13% drop.

Via Automotive News Europe