"People aren?€™t sure of stability, they are not ready for long-term projects," said Oksana Khartonyuk, public relations manager with Ford?€™s local office.
A great deal of hope had been invested in the Ford Plan. Ford?€™s local representative office had planned to use the program to sell about 30 percent of the company?€™s future production, which is based in Vsevolzhsk near St. Petersburg.
The plan was somewhat reminiscent of a lottery. The organizers form groups of 100 private individuals each. Participants pay a starting fee of $400 followed by $300 each month.
Thus every month each group of 100 individuals buys two cars for the group. One car is given away through a lottery and the second goes to whoever is prepared to pay the highest deposit. The unluckiest clients would receive a car 50 months from the moment the particular program is launched.
Khartonyuk said the Ford Plan was frozen with only one group formed.
"We will perform all obligations to our clients. They can continue to participate in the Ford Plan, or they can have their money back," she said.
Ford recently announced a new, simpler program in which individuals would receive loans from local banks with experience in financing automobile purchases. The banks will set the conditions that they regard as most suitable.
Ford will coordinate the work of the banks, improve the system of releasing credits and provide advertising support.
Sergei Ovcharenko, manager of Ford Credit, said that manufacturers and dealers will try to reduce the term for receiving loans and "level out" interest rates. "We have many variants for reducing the loan rates ?€” getting them to down to 10 percent to 12 percent," Ovcharenko said.
He said that the program is open to all banks, while the participation of local banks give it the "necessary flexibility."
"So far, foreign banks have only a limited circle of clients in Russia," he said.
Ford has signed agreements for its new project with two Moscow banks and two in St. Petersburg, including Baltiisky Bank.
Pavel Dolgov, manager for credit operations with Baltiisky Bank, learned of the coming partnership from Vedomosti.
He said Baltiisky Bank has long been providing loans to individuals to enable them to purchase Ford automobiles. In one and a half months, it has issued 90 loans totaling $1 million for all makes of cars. Automobiles made by Mazda are most popular with Baltiisky Bank customers.
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