Russia Hikes Aid to Auto Industry Again

Last week the Russian government extended a vehicle scrappage program with 10 billion rubles (€155 million) in new funding.

This week it is expanding that initiative with an additional 16 billion rubles (€249 million) to support low-rate car loans, cheaper leasing programs and financing aid to help government agencies buy commercial vehicles, Reuters reports.

The government also says it will allocate 5 billion rubles in the second quarter to again extend the old-car scrappage program.

Prime Minister Dmitry Medvedev predicts the new funding will limit shrinkage in the Russian vehicle market this year to 25%. Car and light commercial sales plunged 32% in January-February, according to Russia's Assn. of European Businesses. Some analysts have predicted the market could contract as much as 35% this year.