OREANDA-NEWS. July 7, 2009. In an attempt to revive demand for autos, Russian authorities have substantially broadened lending benefits for auto buyers and decided to apply the interest rate subsidization system to lease schemes. Russian Prime Minister Vladimir Putin said Monday he signed documents in which the upper price range of vehicles covered by the subsidized lending system will be nearly doubled and initial contributions required for auto purchases on lending terms will be cut in half. “I hope all these measures will become an additional driving force for the Russian automotive industry,” Putin said.

Under the new regulations, preferential credits, interest rates of which the state intends to subsidize by two thirds of CBR’s refinancing rate, could be available to Russian citizens who wish to purchase vehicles assembled in Russia and priced at RUB 600,000.00 the highest and are prepared to make down payments equal to 15% of a vehicle’s price tag. Earlier, state subsidies were limited to autos with a price ceiling of RUB 350,000.00 and initial contributions were not to be less than 30% of their prices. During the first five months of 2009 passenger car sales crashed by nearly 50% in Russia and in May sales data again set another negative record.