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Russia may extend car-buying subsidy scheme into 2015

Russia's Industry and Trade Ministry -  may extend car-buying subsidy scheme into 2015

Russia may extend incentives for new-vehicle purchases beyond 2014, the Industry and Trade Ministry said, in an effort to help the car industry weather an economic downturn.

The ministry said in a statement the scheme could be extended into 2015, citing industry minister Denis Manturov. It gave no details of possible additional funding of the program.

The government earlier earmarked 10 billion rubles ($244 million) to fund the trade-in scheme that will run through to the end of the year.

Russia’s auto market is in free fall with new-car sales plunging by 20 percent last month following a 26 percent drop in August, according to the Association of European Businesses lobby group.

Car sales are falling fast as Russia’s weak economy is hit by western sanctions over the conflict in Ukraine and buyers delay making large purchases.

In the first nine months, sales were down 13 percent to 1.78 million.

Under the existing scheme, buyers of new passenger cars are eligible for a discount of at least 40,000 rubles (€752) when scrapping or trading in their old vehicles.

The AEB said it expects full-year volume to be down 12 percent in 2014 to 2.45 million as the scheme helps slow down the rate of decline.