A meeting chaired by prime minister Vladimir Putin in Togliatti has resulted in some generous and specific decisions concerning state aid for the Russian auto industry.
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The meeting was attended by deputy prime minister Igor Sechin, industry and trade minister Viktor Khristenko, the chief executives of AvtoVAZ, GAZ Group, KamAZ, and Sollers, and state bank representatives, the Russian Media Monitoring Agency said.
It was decided that the state will provide financial aid for all of Russia’s major auto-makers. As expected, the largest amount of aid will go to AvtoVAZ: an urgent loan of 20bn rubles to cover debt payments, with further money promised in the near future. GAZ, KamAZ, and Sollers will get state guarantees for loans of 4bn, 4.6bn, and 5bn rubles respectively. Most experts are speaking favourably about the government’s initiatives, while emphasising that a great deal will depend on the state of the market – especially demand.
Khristenko predicted that the Russian auto market could shrink by more than half in 2009.
The government had already allocated 6bn rubles to the auto industry to partially cover repayments on loans for Russian exporters, and 2.5bn rubles in interest subsidies for car-makers and transport machine-building enterprises.
Russian automakers have also received some extra protection against competition from foreign-made cars, in the form of higher import duties on all vehicles, including used cars. The government has also allocated 12.5bn rubles in 2009 for state purchases of Russian-made vehicles.
