Leading Russian automotive company GAZ and the maker of Russia's "other car", the Volga saloon, is to get RUB16bn ($281mn) in state guarantees.
"The state guarantees for GAZ are in the end stage. That is that all the necessary measures … have been taken. The company will receive these guarantees soon," Trade Minister Denis Manturov said at a conference on June 4, reports the Moscow Times.
Russia's car market has been hard hit this year by a combination of a slowing economy and tumbling real incomes, despite the first signs of a bottoming out in the last month. light commercial vehicles (LCV) sales down by 42% in April y/y to 132,000 unites, according to the May 13 release of the Association of European Businesses (AEB) that compiles industry data. In the first four months of this year, a total of 516,000 cars were sold.
April's plunge in sales follows a 36% y/y LCV sales contraction in Q1 and 42% in March alone. In January, AEB believed that car sales for 2015 overall will shrink by 25%.
The government is trying to stop the rot with various subsidies to both producers and on interest rates for car loans to support the sector.
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