OREANDA-NEWS. After a sharp decline in the effectiveness of state car industry at the expense of the recycling program, Ministry of Industry decided to expand the range of state subsidies. As the Minister of Industry and Trade, Denis Manturov, said, the government proposed to allocate another 3.5 billion Rubles for the program's preferential lending and operational leasing, by evaluating them in 1.5 billion Rubles and 2 billion Rubles, respectively.

In addition, it was decided to extend the recycling program in the second quarter, wrote the newspaper "Kommersant". According to the head of Industry and Trade, it will be allocated "not less than 5 billion Rubles" (originally in the anti-crisis measures it was the possibility of allocating of 10 billion Rubles). But Mr.Manturov noted that recycling is "not as fast" and funds will be needed only in May. From September until the end of 2014 the scrappage cost the budget 12.9 billion Rubles; it was sold almost 200,000 cars, for the first quarter it was allocated 10 billion Rubles and the Ministry of Industry and Trade wanted to sell about 170 thousand cars, but on February 22nd it was sold only 16,000 cars. The idea to combine recycling and car loans have already been discussed by the government, but sources say the problem was to find financing, but now, they believe, funds for car loans and leasing were redistributed from unclaimed 5 billion Rubles for recycling.

Preferential car loans functioned in the second half of 2013, the state subsidized the banks 2/3 of the refinancing rate of the Central Bank (8.25%). Car dealers have lobbied its renewal for the whole last year, especially actively in December, after increasing of the key rate of the Central Bank. In January, the association "Russian dealers" (ROAD) offered Dmitry Medvedev to allocate it 20 billion Rubles for 2015, or 10 billion Rubles for six months, and to ensure the effective rate at the level of 15%, but the Ministry of Industry did not consider it appropriate. Mr.Manturov explained that at current rates the compensation from the budget "will go to the banks." But on Jan. 29, it was announced that the program can be resumed after the reduction of the key rate.

Conditions for new programs were not disclosed by the Ministry of Industry and Trade, but sources say that it is a subsidized loan 2/3 key rate of the Central Bank (it is 14%) from April 1st and until the end of the year for the cars that cost up to 1 mln. Rubles (it is in case of prepayment of quarter of the price). A number of interviewees said that it will be allocated at least 2 billion Rubles for auto loans. But, as noted Andrei Rozhkov from IFC "Metropol", this amount until the end of the year is not enough, money will be distributed for one and a half months, and for 1.5 billion Rubles in subsidies it will be sold 28-29 thousand cars. And if in the second quarter the preferential auto loans will be synchronized with the recycling program, then it will be possible to implement about 80 thousand cars (30% of car sales are on credit). The head of ROAD, Vladimir Mozhenkov, at the end of February estimated the cumulative effect from the subsidy programs of leasing and car loans in approximately 250 thousand cars.

The general director Frank Research Group, Yuri Gribanov, said that in February the average auto loan rate was 20-30%, with the subsidy the rate will be 14-19%. According to sources, support of auto leasing will be also established to subsidize a part of the leasing rate, and its volume will be also 2/3 of the key rate.