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Russian car owners look to cash in their clunkers

Russia is about to launch the cash-for-clunkers program targeted at boosting domestic car sales. But experts say the scale of the project is too small, and the country’s car-recycling infrastructure is far from ready.

Ilya Shwartzburg, a retired automotive journalist, is anxiously waiting for the cash-for-clunkers program to start in Russia. He’s hoping the rebate he’ll get for his 11-year-old Lada will help him buy a new car.

The state promises 50 thousand rubles – around $1700 – to owners recycling cars 10 years old and older.

They can use it to buy a new Russian or locally assembled foreign car. But Shwartzburg doubts the program will make a dent in updating Russia’s aging car fleet.

“The state should offer more money to car owners. Maybe 75 thousand Roubles -equivalent to what it was in Europe. Then owners would have a motivation to find the additional $3 thousand dollars needed to buy a new car.”

Aleksei Rakhmanov, from the Industry and Trade Ministry defends the scale of the program, saying it’ll help prevent sharp fluctuations in the car market:

“I wish we could do more. But we still have to prove that this program works in Russia. And doing it on a bigger scale could cause sharp fluctuations on the car market.”

Unlike in Europe, the United States or Japan, in Russia, less than 20 percent of old cars are currently recycled, and the legislation is far from ready to support effective and environmentally friendly recycling.

And there’s another problem – The junk yards are not certified to recycle the clunkers that owners would turn in when the program starts in January next year. They fear the flood of old cars would push Russia’s waste management system off a cliff, leaving people like Shwartzburg wondering if the program will cost Russian taxpayers more than it will return.