Alexei Nikolsky, Yulia Fedorinova and Gleb Stolyarov contributed to this article
Ministries and other government agencies will buy 12.5 billion roubles' worth of cars and other vehicles this year.
The Government is trying to find ways to compensate for falling car sales. This year government ministries and departments will spend 12.5 billion roubles on purchasing cars and commercial vehicles from Russian manufacturers.
The order to that effect was signed on Monday by Prime Minister Vladimir Putin. The biggest beneficiaries will be the Defence Ministry (4 billion roubles), the Ministry of Healthcare and Social Development (3.76 billion roubles) and the Ministry of the Interior (2.43 billion roubles). The list of manufacturers who will supply the cars will be approved by the Ministry of Industry and Trade, says the document. 12.5 billion roubles is enough to buy 25,667 Volga Siber cars (the Gorky Auto Plant, here and further all prices are for basic models), or 15,822 Toyota Camrys (from a plant outside St Petersburg), or 8,300 KamAZ drop-side lorries, or 14,723 Fiat Ducato vehicles (Sollers).
Officials cannot say which manufacturers will be chosen. The Ministry of Industry and Trade wants to include all plants situated in Russia, said Deputy Minister of Industry and Trade Stanislav Naumov. Only manufacturers that have their production facilities in Russia can make the list, says an official from another government agency. Among foreign companies, clearance will be given only to those that have signed an agreement on localisation, a staff member of one of the auto makers heard it said. This means Avtotor and makers of Chinese cars may find themselves out in the cold. A source with a Russian auto manufacturer says officials plan to allocate purchases to plants according to their market shares.
The list can also be approved by a presidential decree, say officials from the two departments drafting the proposals. The document is expected to include the right of the ministries to conclude contracts with Russian producers without tendering. Moreover, companies will not have to guarantee deliveries, while contractors will be able to advance up to 50% of the contract sum to producers.
A Defence Ministry official says his ministry plans to spend practically all its money on buying KamAZ and Ural lorries of various modifications. According to a Ministry of the Interior spokesman, his Ministry will buy Russian-made vehicles in dozens of configurations - from cars for the top management and patrol service, through ambulance cars to heavy lorries designed for logistic duties and interior troops. There are no plans to buy costly import models for high-ranking officials, he said.
Managers from some auto makers have told Vedomosti that they know about the decree. "This is the only way of ensuring the effective use of state funds as direct aid to auto makers," said a Sollers spokesman. A package of contracts involving a state order is important for KamAZ, says the company's manager: Although it has not yet been put together for this year, in 2007-2008 it accounted for an average of 10% of all sales (47,000 in 2008). An AvtoVAZ spokesman says his company's state contract was among the lowest: Last year the company won two Ministry of Healthcare and Social Development tenders to supply only 28,300 vehicles (4.5% of last year's domestic sales). Valery Gorbunov, general director of Avtotor (which assembles BMW, Kia, and General Motors cars) says no one has discussed state contracts with his company.
A staff member of one of the auto producers noted that a decree on state purchases was not of the utmost importance compared with other requests from the auto manufacturers. In December, Mr Putin promised auto makers state guarantees for 70 billion roubles in loans, the redeeming of 60 billion roubles' worth of bonds, and injections for leasing companies exceeding 80 billion roubles. None of these measures had been realised, the official complained.
Besides, all this is unlikely to boost car sales. Sergei Tselikov, general director of the Avtostat agency, is forecasting that the volume of the car market alone will drop by 25% in 2009, down to $37 billion (or 1.3 trillion roubles at the average exchange rate predicted by the Government). Thus, the amounts allocated by the Government will be less than 1% of that amount.
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A different kind of aid
By Dmitry Kazmin
Prime Minister Vladimir Putin promised Samara Governor Vladimir Artyakov and Russian Technology General Director Sergei Chemezov that he would allocate 620 million roubles for the Samara Region in 2009 to finance social amenities handed back by AvtoVAZ. A regional government official explained that the region had already received one-third of that sum, while the rest of the money was being delayed. Mr Putin's press-secretary Dmitry Peskov said no other issues had been discussed.