Russian Sales Fall in February, New Scrappage Program Begins

Automakers sold 91,900 passenger and light commercial vehicles last month in Russia, down one-third from the 134,900 shipped in February 2009, according to the Assn. of European Businesses.

Kia Motors Corp. was the only major automaker to post higher month-over-month sales, with deliveries growing 21% to 5,700 vehicles. The South Korean brand finished fourth behind Lada, Hyundai and Chevrolet.

Nine of the top 10 selling models were produced in Russia. The list included five Ladas, including the top-selling Priora and second-best Samara. Renault's Logan sedan and Ford's Focus compact sedan ranked third and fifth, respectively. General Motors' Chevrolet Niva SUV and Lacetti compact and Daewoo Nexia sedan held eighth through 10th place.

Last month's slowdown likely stems from consumers postponing purchases until Russia's cash-for-clunker incentive that started a week ago. Under the program, which runs through October, buyers receive $1,700 off the purchase of a new car when they turn in a vehicle that is at least 10 years old.

Dealers already are criticizing the program as poorly organized. Complaints range from a poorly conceived process to submit vouchers to having to transport cars long distances to recycling plants that may not be ready to accept the cars. Some say the process also has potential for corruption.

The government has set aside about $340 million for the program, which would cover the purchase of 200,000 vehicles. Last year, light vehicle sales dropped 49% to 1.47 million vehicles. AEB forecasts that scrappage incentives will push sales high enough to offset the first-quarter slump and match last year's total.