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9 Apr, 2010 17:30

Cash for clunkers powers into top gear

It’s a month since cash for clunkers programme was launched in Russia and strong demand has already taken 85% of the planned supply of new Lada cars.

According to the programme, any car, Russian or foreign, at least 10 years old, can be disposed of at participating dealerships across the country. The owner gets a $1600 rebate on any new domestically-produced automobile.

For Anna Ponomareva, who got her first LADA as a present from her grandfather to learn how to drive, Russian cars are cheap and reliable alternative to foreign brands. And this is a common approach among Russian customers.

"I'm not an experienced driver. So buying a foreign make is not an option – the cost of service and parts is too high. So a domestic model suits my needs much better."

Dealers across Russia say the results are overwhelming, with 72% of all buyers wanting to buy LADAs. The cheapest models were sold out in just three weeks and Olga Rogacheva, senior marketing manager at Lada Kuban, also says the demand is strong.

"I can say that this program is very popular with our customers. In just one month we've received more than 4000 requests, so we issued 450 certificates and sold 170 new cars." 

Currently there are more than 14 million cars in Russia that qualify. The quota for this experiment is just 200 000 vehicles, so dealers expect it run out two months ahead of the November 1st deadline. But for those who miss out this time, the government may turn "cash for clunkers" into a permanent program.