Support of the Industrial sector: Dmitry Anatolyevich Gulin

Dmitry Anatolyevich Gulin
President of the Association "Russian Automobile Dealers" (ROAD)

- Russian automotive industry, being in a difficult position, has received the timely support in the form of strategies which aim at both stimulating consumer demand and developing conditions for normal work of enterprises.

One of such steps is subsidization of interest rates on the loans for some cars of Russian assembly. This measure is by all means very important but we cannot evaluate its effectiveness for on the one hand the effect is very slight and on the other hand it has been implemented not so long ago. To say more, banks need some time so as to try the system.
At present, according to our statistics, 2-3% out of all cars including direct sales and sales with the use of financial instruments are sold on subsidized loans. In the structure of loan sales of vehicles the purchase share on subsidized loans makes a total 9-10%.

In spite of the fact that for the support of Russian automotive market the appropriate measures were taken, at the present time its members are on the stage of certain expectation. Many of them hope that the measures taken will lead to positive changes in consumer behavior and will stir up the sales. At the same time, I think, we will be able to speak about any appreciable results only in several months. I suppose that the sales figures on the loan subsidized programmes will have increased by this time.

To increase the effectiveness of these programmes we need more active promotion. Particularly it can be done at the expense of PR and advertisement materials including those carried out in showrooms. However, when carrying out such activities, the division of responsibility including financial one is not quite clear. Who is going to pay for such activities and how? Probably this is one of the causes of insufficient popularization of the subsidized auto loans.

I think that one more important point related to the government stimulation of auto loans is the amount of funds intended for the support. Under good concurrence of circumstances being the high demand for the subsidized auto loans, 2 billion RUR will not be enough. By the way, in Germany the automotive market of which can be compared with ours the same amount of money makes a total €5 billion. On the whole the example of Germany is model in terms of the government support including subsidies for auto loans. As a result of the policy carried out by the Government the car sales in this country increased by 20% and more.

That is why, when implementation of such programmes in Russia, we should take into consideration the positive experience of other countries. We must not only allocate funds for stimulation of auto loans now, but also calculate prospective expenses for such programmes which, of course, must be carried out in the future. We should not limit ourselves to the period when we must repay debts on the present terms. The prolongation will provide the reduction in monthly payments which can be a positive factor for prospective consumers and bring about the increase of sales on subsidized loans.