Effectiveness of state support for the automotive industry depends on many factors

5 november 2019 | Rossiyskaya Gazeta

"The decrease in truck sales in 2019 is the result of a kind of "wave" arising from economic shocks, when a sharp market growth is superseded by a recession, or vice versa. In our case, the recession is due to the high base effect in the first half of 2018, and the growth is associated with the implementation of deferred demand, which was formed in 2015-2016", Grigory Mikryukov, Head of the Department for Sectors of Economy of the Analytical Center, gave his comments to Rossiyskaya Gazeta.

Grigoriy Mikryukov
Grigoriy Mikryukov
Department for Sectors of Economy

According to the expert, a similar situation is observed on the market of light commercial vehicles (LCV). However, at the end of the year, sales of LCVs may be further supported by the ambulance and school bus fleet upgrade program, for which 10 billion rubles were allocated.

As for the state support as a whole, Mr. Mikryukov believes that its effectiveness depends on many factors, including the phase of market development and economic cycles. The analysis carried out by the specialists of the Analytical Center showed that, for example, subsidizing of the interest rate for car loans has a good effect and increases sales today. And tomorrow it may just be the financial support for persons who decided to buy cars of a certain price category.

According to the Treasury of Russia, about 230 billion rubles should be allocated for the development of the automotive industry in Russia in 2019, Mikryukov said. The main funds are allocated for subsidies to manufacturers of wheeled vehicles that meet Euro-4 and Euro-5 standards (123 billion rubles), for partial compensation of costs of the work site arrangement (51.5 billion rubles), for production of cars and their components (18.8 billion rubles), for the use of energy resources (5.1 billion rubles). "The share of industrial subsidies in the approved budget allocations for the automotive industry support in 2019 reaches 86 percent", the expert of the Analytical Center specified.

"Another direction of the state support is demand support programs", Mr. Mikryukov continued. "For example, in 2019, 9.5 billion rubles were allocated for reimbursement of expenses to institutions that have been issuing preferential car loans since 2015. 5.2 billion rubles were allocated for partial compensation of costs of leasing companies under leasing agreements concluded for 2018-2020. "It is worth noting the state support for the development of electric vehicles and natural gas vehicles: 2.5 billion rubles were allocated to manufacturers of natural gas vehicles, and 1.5 billion rubles — to manufacturers of urban ground electric vehicles. Additional budget funds were allocated for some demand support programs (preferential car loans and preferential leasing) in July", the expert of the Analytical Center told.

Source: Rossiyskaya Gazeta

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