Vladimir Putin says Russia auto market would drop 30-40 percent if no state support

Russia’s vehicle market would diminish by 30 to 40 percent present year if it were not receiving state support, Russian news agencies quoted President Vladimir Putin as stating on Saturday.

Russian auto sales have been falling for a fourth successive year amidst a weakening domestic economy, a depreciating Ruble currency and lower oil costs.

The Association of European Businesses (AEB) lobby group observes Russia’s sales of new automobiles and light business automobiles dropping 10.3 percent to 1.44 million units in 2016.

“We have handled not only to save the car production sector however sales of trucks and buses (likewise) increased slightly,” Interfax news agency mentioned Putin as saying.

Support for the vehicle sector will continue in 2017, Putin informed a meeting with plant workers in Yaroslavl, main Russia. He added that such support would deserve 65 billion rubles ($990 million) in 2016.

According to government information, Russia is going to invest 50 billion rubles on auto-sector support this year, but some authorities include funds left from 2015 in this year’s overall figure.

Russia’s Market Ministry recently proposed the government raise vehicle support to 64.1 billion rubles in 2017 from 50 billion in 2016, a copy of the proposition observed by Reuters showed.

However, the ministry has likewise proposed cancelling a “cash for clunkers” program, which provides buyers a state-financed discount rate on new-car purchases in exchange for ditching their old automobiles.

Russia’s October vehicle market dropped by a moderate 2.6 percent due to a low base effect in the same month a year ago, while the AEB has stated any trend stabilization in 2017 would be temporary without significant government support.