Russian Cash for Clunkers Program Affected by Bureaucracy

Last year, the Russian automotive market saw a massive 56 percent decrease, only managing to total 1.4 million units, in spite of the fact that the country’s government had introduced a scrappage scheme, supporting loan to customers of any new car built in Russia and priced under 13,500 euro.

It seems that the sales reports for the current year might not show a hefty rebound, as the 2010 cash for clunkers program is heavily affected by bureaucracy and corruption, as Bloomberg reports.

If there are bureaucratic delays and corruption in its implementation, the program may not have the same beneficial impact as we have seen in some European markets,” Stanley Root, head of PricewaterhouseCoopers LLP’s automotive group, was quoted as saying by Bloomberg.

The subsidies program developed for the current year consists of 200,000 vouchers worth $1,677 each, which are to be offered to customers who trade-in a car older than 1- years old and buy a domestic-built vehicle. Customers can choose from a wide range of cars, as over 10 international brands are present on the Russian car market.

However, multiple sources indicate that the program only sound good in theory and that it will fail to work on the real market due to multiple issues such as the lack of transparency and the long duration of the process.

The program is about to start, but there is still no transparency in the process,” Valery Sheromov, head of the Piter-Lada dealership in St. Petersburg told the aforementioned source.
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About the author: Andrei Tutu
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In his quest to bring you the most impressive automotive creations, Andrei relies on learning as a superpower. There's quite a bit of room in the garage that is this aficionado's heart, so factory-condition classics and widebody contraptions with turbos poking through the hood can peacefully coexist.
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