Russia aims to jump start car sales with trade-in incentives

MOSCOW, Aug 28 (AFP): The Russian government announced Thursday a cash-for-clunkers programme, offering consumers an incentive of some $1,100 to jump start stalled car sales.

"This could seriously stimulate sales," Prime Minister Dmitry Medvedev said at a government meeting, according to Russian news agencies.

Consumers who trade in a car at least six years-old will be able to receive 40,000 rubles (825 euros, $1,100) towards the purchase of a new vehicle, officials said.

Commercial trucks would get a bonus of 350,000 rubles in the programme to last from September 1 until at least the end of the year. "We hope to encourage the sale of more than 170,000 vehicles by the end of the year," Industry Minister Denis Manturov said.

Russian car sales plunged by nearly 23 per cent to fewer than 181,000 vehicles in July, according to the Association of European Businesses which compiles data on the market.

Sales are down by nearly a tenth for the year to date.

Manturov said the programme would likely cost the federal budget 10 billion rubles.

The last trade-in incentive programme that Russia ran, during 2010 and 2011, cost it 16 billion rubles.