Putin told the government to make cars costing up to 600,000 rubles ($19,000) eligible for purchase under three-year subsidized loans, an increase from the 350,000 rubles approved in March. The change raises the prospect for stronger demand for locally made Toyotas, Nissans and Fords.
The government had set aside 2 billion rubles in March for potential subsidies to cover a hefty portion of interest payments on car loans. The federal money would compensate two-thirds of the Central Bank’s refinancing rate, which now stands at 11.5 percent.
The previous ceiling favored cheaper vehicles, such as those produced by state-controlled AvtoVAZ.
The automaker, Russia’s largest, said last week that it had lost about 25 billion rubles last year and that it could still sink without further state support. The government has given AvtoVAZ some 25 billion rubles in loans and other aid this year.
Speaking at the weekly session of the Presidium, or a smaller Cabinet, Putin also ordered a reduction in the down payment on the loans to 15 percent of the car’s cost, from the previous 30 percent.
Industry and Trade Minister Viktor Khristenko said he expected the loans to help sell 120,000 cars this year, which would amount to 10 percent of anticipated car sales. So far, 15,000 people have applied for the lower loans, he said.
As for commercial vehicles, Putin said the government would allocate subsidies to leasing companies to promote sales. He did not specify the amount of money for such subsidies.
The measures will help if people regain confidence in their financial security, said Mikhail Pak, a car-market analyst at investment company Metropol.
“If a person is not sure about his income, he isn’t going to take out a loan, even at zero-percent interest,” he said.
Before the Presidium meeting in Moscow, Putin traveled to Rostov-on-Don to say he was content with the government efforts to alleviate crisis-related problems at one of Russia’s largest combine makers, Rostselmash.
The measures, approved in December, included the introduction of temporary import duties for farm machinery, which have hurt U.S. manufacturers Deere & Co. and Caterpillar.
The government has also allocated 25 billion rubles to the state-controlled leasing operator, Rosagroleasing, to purchase combines from this and similar plants.
“The measures allowed us to prevent a landslide fall in output and a halt of manufacturing,” Putin said, adding that production declined by 23 percent.
He said he was pleased that the company did not cut too many jobs, laying off 11 percent of its work force, or 765 people.
Television showed him in casual wear throughout the trip, climbing into a shiny new corn combine, starting it and trying the controls before holding a meeting to discuss the developments at the plant and in the industry.
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