Vedomosti: "Off to Fetch Money"
Nadezhda Ivanitskaya and Gleb Stolyarov
The Auto Industry
Carmakers are requesting funding to replenish their circulating assets and buyer subsidies
On December 19, Prime Minister Vladimir Putin will chair a meeting with the CEOs of Russian automotive giants at truck maker KAMAZ in Naberezhnye Chelny in Tatarstan, the Government press service said. During the meeting, Mr Putin will decide on measures to support automakers who want the Government to promptly facilitate demand and to issue easy-term loan guarantees.
Apart from financing a corporate investment programme, AvtoVAZ, the largest national carmaker, needs another 26 billion roubles to boost circulating assets, to pay suppliers and to refinance loans, AvtoVAZ CEO Boris Alyoshin told the paper. Mr Alyoshin said he did not like the loan terms being offered by state banks. "16-18% interest is too much. We would annually spend at least 3.5 billion roubles on repaying interest," Mr Alyoshin told the paper. He said loans exceeding the 13% refinancing rate would not help AvtoVAZ. Although urgent measures are needed, the Government has been discussing the auto industry's financial support for the last three months, said Mr Alyoshin. And, even though AvtoVAZ has requested a $1 billion loan from Vnesheconombank, it has received no answer to date.
Yelena Matveyeva, Deputy Board Chairperson at GAZ Group, the second largest Russian automaker, said loans were currently too expensive, and that reduced rate loans were needed to replenish circulating assets, to refinance debt and to overhaul production.
Mr Alyoshin also wants to ask Mr Putin to subsidise car buyers out of the budget. "The market is shrinking. The state could compensate buyers about $1,000 on Russian-assembled vehicles, that match Euro-3 fuel standards," Mr Alyoshin said. He believes this measure would increase the market by 20%, and said AvtoVAZ was prepared to subsidise car-loan rates.
Direct state subsidies which are popular in Europe should also be practiced in Russia, said Renault spokesperson Oksana Nazarova.
Commercial-vehicle manufacturers, namely, KAMAZ, GAZ Group and Sollers, are asking the Government to facilitate lease contracts. Such contracts are almost non-existent, said Igor Korovkin, executive director of the Association of Russian Automakers. Automotive concerns say interest rates have soared from 16% to 25%-30%. "We propose that the state issue reduced rate loans to authorised leasing companies," a Sollers spokesperson told the paper. Ms Matveyeva said customers would be reimbursed for two-thirds of interest payments. A KAMAZ spokesman said leasing companies should receive loans worth at least 15 billion roubles.
A Sollers spokesperson said the process for state vehicle purchases had to be streamlined. "We will propose 50%, rather than 30%, down payments during state purchases that must be centralised," he told the paper.
The Prime Minister's spokesman Dmitry Peskov said auto-industry representatives had made these proposals to a commission headed by First Deputy Prime Minister Igor Shuvalov, that their proposals were being examined, and that a decision would be announced at the meeting in Naberezhnye Chelny.
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Putin's Influence
Yulia Fedorinova
The previous conference on automotive-industry issues, chaired by Vladimir Putin this May, decided to raise used-car import duties. Under the December 10 resolution, 25-35% duties will be charged on cars over five years old. And 30% duties are stipulated for new vehicles. This decision caused protests in Russia's Far East. A Government official said there were no plans to revise the document or to postpone its enactment on January 12, 2009.
