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7 May, 2010 07:27

Car purchase scheme brings out the buyers

The second month of the Russian cash for clunkers scheme has locally produced cars getting a major boost, with demand so strong that there may not be enough vouchers to meet demand.

An idea that’s moment has come: Exchange an old car for 50 thousand roubles to put towards a brand new car. Sales of models included in the programme jumped 15%. Dealers have already issued 100 thousand certificates – half the total – in the first 2 months.

Top of the shopping list are the models of beleaguered domestic champion, Autovaz, especially in the regions. It’s the cheapest in the programme. Among foreign brands – Renault Logan and Ford Focus. Ernest and Young Analyst, Ivan Bonchev says the scheme’s impact is at the very lowest end of the market.

“The most demand car has been the Lada classic model – the oldest one, the cheapest one. So even Avtovaz, I guess, were quite surprised to see the results, because I guess they were putting a big stake on the Kalina and Priora, as their relatively more expensive models, where they could earn more. However this hasn’t been the case. So in the case of foreign OEM’s it would prove quite difficult to compete in this very lowest segment.”

Those who dreamed of a foreign brand got a chance to buy special editions created for the programme at half the usual price. Government subsidies and lower bank rates also encourage people to spend, according to Autocenter director, Elena kalinenko.

“We see a rise of autocredits, with 40-45% of cars being purchased with credit. People use the government subsidies programme together with utilization programme that gives them a significant saving.”

But not everyone got the chance to trade in their clunker.for some, the programme came too late. Russian streets should have been cleared of "antique cars", but the programme only accepts cars you can drive. If your old motor, is missing windows or wheels it will stay, parked as a sad memory of those who didn't make the grade.