Russian automaker Severstal-Auto is expected to offer loans to buyers of its UAZ Hunter and Patriot sports utility vehicles (SUVs), making it the first among Russian automakers to provide consumer financing, Dmitry Bogdanov, director of UAZ’ sales department told Russian business daily Vedomosti.
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Severstal-Auto will start providing loans on 17 April in 49 Russian cities at the offices of Vneshtorgbank Retail Financial Services. The annual interest rate of a 12-month loan will be 5%, while the interest rate of a 3-year loan will be 7.5%. The minimal initial instalment is set at 10% of the vehicle’s value.
Buyers of Severstal-Auto’s SUVs will also be able to get car insurance from Russia’s major insurance company Rosgosstrakh, costing 5% of the vehicle’s price, the report said.
Severstal-Auto has decided to launch its own loan program to support the sales of the UAZ Patriot SUV, a more recent and expensive model, the automaker said.
Production of Patriots started in August 2005 and 4,000 were sold in August-December 2005. This year the company plans to sell 12,000.
Severstal-Auto has decided to follow in the footsteps of foreign car producers, which have their own loan programmes in Russia, Deutsche UFG investment bank analyst Yelena Sakhnova told the daily.
Ford offers Russia’s lowest car loan interest rate – 4.9%, Sakhnova said. Renault and Nissan offer loans at and Audi’s rate is 5.9%, she added.
Car dealers in Russia offer more expensive bank loans to their customers. Foreign currency car loans are offered at an interest rate of at least 9%, the daily reported.
Severstal-Auto will partially subsidise the auto loan interest payments, the company told the daily.
