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Russia bans state purchase of foreign-made cars to aid local automakers

Russian Prime Minister Dmitry Medvedev - Russia bans state purchase of foreign-made cars to aid local automakers

Prime Minister Dmitry Medvedev has ordered a ban on Russian state and municipal purchases of foreign-manufactured cars and machinery to support local producers.

The ban will include cars for high-ranking officials, public transportation, emergency-service vehicles as well as agricultural and construction machinery, according to a statement from Medvedev’s meeting with deputy prime ministers posted today on the government’s Web site.

Russia is struggling with the slowest economic growth since a 2009 recession as the United States and the European Union threaten to add to sanctions following President Vladimir Putin’s annexation of Crimea.

Sales of new cars in Russia fell to their lowest level in more than four years in June as a weaker ruble curbed demand.

AvtoVAZ, Russia’s biggest carmaker, plans to cut 19 percent of its jobs this year, the company, controlled by Renault-Nissan, said last month.

“The state buys a lot; the budget allocates enormous resources for the purchase of goods and services,” Medvedev said. “It’s better if these resources go to local companies rather than foreign producers in cases when local companies are able to compete with foreign producers based on quality and price.”

The ban applies only to vehicles made outside of Russia, not to foreign brands produced in Russia that meet localization requirements, the RIA Novosti news agency reported, citing Deputy Prime Minister Arkady Dvorkovich.