Expansion underway for Russia's Ministry of Industry and Trade's auto loan preferences program
Rewritten Article:
Auto Loan Program in Russia Expands for Families and Domestic Cars
The auto loan scene in Russia has witnessed a shift from last year, prompting the Industry and Trade Ministry to heed Denis Manturov's instructions and widen the subsidized credit program. Anton Alikhanov, the Industry and Trade Minister, shared this development with TASS, expressing optimism that this step will positively impact the industry.
However, it's unlikely that we'll break last year's records, as the market is under strain from overflowing car stocks. Nevertheless, Alikhanov remains confident that we'll sail through this challenging period.
Notably, the ministry aims to reinstate the category of families with children in the program, which was reduced in 2023 but is now in line for a comeback as early as late April 2025. Initially, families with children could only secure subsidies for car purchases on credit in the Far East, where the base discount was 25%.
Previously, the ministry was contemplating increasing the discount for residents of Donbass and Novorossiya in the subsidized auto loan program. It's worth mentioning that an impressive budget allocation of 36 billion rubles in 2025, and 37.7 billion rubles annually in 2026 and 2027, has been set aside for the program.
Back in March of this year, the Association of Russian Automobile Dealers (RöAD) pleaded for government support, citing a sharp decline in vehicle sales in 2025. In 2024, sales surged by nearly 50% to 1.57 million vehicles. However, high inventories and key interest rates (21%) have dampened spirits for the coming year.
Experts from the Ural automobile market recently gathered in a roundtable discussion to discuss the market outlook for 2025. You can read about their predictions in our article, "Record 2024 not to be repeated. What are market participants hoping for in 2025?"
On a bright note, production of the new Lada Iskra model commenced in Tolyatti last week. Slotting between Granta and Vesta, the new car qualifies for the subsidized credit program for cars with internal combustion engines priced up to 2 million rubles, achieving at least 2000 points for localization. Sales start on July 20, with actual prices yet to be announced. Previously, Iskra was expected to cost between 1.2 and 1.6 million rubles. For comparison, the cheapest Granta currently sells at 749,900 rubles (Government purchases only), and Vesta starts at 1,240,000 rubles.
In the initial months of 2025, seven auto manufacturers announced substantial price cuts and massive discounts on their models, primarily impacting Chinese brands. Unfortunately, some Chinese brands might exit the Russian market by the end of 2025 due to lackluster sales and unprofitable franchises. Analysts and dealers have flagged Oting, Kaiyi, SWM, Livan, VGV, Forthing, JMC, Ora, Skywell, Haima, and MG as brands that are not yielding adequate profitability for dealers.
Zen Zen.News Email Newsletter Telegram VK
[1] The current economic climate and high uncertainty have led to a decrease in interest in car loans
[2] Expansion of the program aims to boost sales of domestic vehicles
[3] Challenges faced by the Russian car market, including low demand and a drop in sales of domestically-made cars
[5] Increased calls for state support, such as reinstating subsidies for families buying cars on credit, in response to the market decline
- I'm not sure if the current economic uncertainty will lead to an increase in interest for car loans, despite the expansion of the subsidized program.
- The aim of widening the subsidized credit program is to boost sales of domestic vehicles, particularly in the face of market challenges such as low demand and a drop in sales of domestically-made cars.
- The auto industry in Russia is facing substantial challenges, including high interest rates, overflowing car stocks, and a decline in sales, which has been a cause for concern for industry experts.
- In response to the market decline, there have been increased calls for state support, such as resuming subsidies for families buying cars on credit, which was reduced in 2023 but is now being considered for a comeback.
- In an effort to remain competitive and bolster sales, seven auto manufacturers have announced substantial price cuts and massive discounts on their models, though some Chinese brands might exit the Russian market by the end of 2025 due to low profitability.
