What was once among the world’s fastest-growing car markets has struggled to avert disaster in recent months. Now, Russian authorities hope to turn things around by borrowing an idea that’s worked in a number of other markets, including the U.S., throwing money at it.
The Russian version dwarfs America’s Cash for Clunkers program, however, and could eventually involve the investment of $20 billion over a 10-year period, with an initial $6 billion meant to yank the market out of its deep recession.
As in the U.S., that money will be used to stilulate demand for new vehicles – which plunged 49% last year – and to get off the road as many of Russia’s smoke-belching Ladas and Vazs as possible. But some of the money will also be used to train workers and to prop up the struggling home automaker, AvtoVaz, which still holds a 30% share of the market.
“Our end goal is to build a modern auto industry in Russia, including the entire production chain — from the steel sheet to the end product,” Prime Minister Vladimir Putin said, in a statement quoted by the Detroit Free Press.