The incentives that the Russian government is providing for new-vehicle purchases could go beyond 2014, according to the Industry and Trade Ministry citing industry minister Denis Manturov. The ministry, however, provided no details of possible additional funding of the scheme.
Russia has already allotted RUB10 billion ($244 million) to fund the trade-in program that will last until to the end of 2014, as part of an effort to support the auto industry as it tries to go through a current economic slump. In fact, the Russian auto market has seen vehicle sales falling.
Auto sales in Russia dropped 20 percent and 26 percent in August and September, respectively, according to the Association of European Businesses lobby group. Russia’s already slumping economy is suffering further from western sanctions over the current conflict in Ukraine as well as from consumer delaying making large purchases – all resulting to lower demand for vehicles.
Carmakers in Russia saw their sales fall 13 percent in the first nine months of 2014 to 1.78 million. Under the current trade-in scheme or scrappage program, buyers of new passenger cars could avail of at least RUB40,000 (752 euros) when scrapping or trading in their old vehicles.
According to the AEB, full-year sales in Russia will dive down 12 percent in 2014 to 2.45 million as the trade-in scheme help encourage consumers to buy vehicles.