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Russian PM vows to keep national car industry afloat

15 September 2010 03:18 (UTC +04:00)

Baku-APA. World car industry should not resolve its problems at the cost of Russia, Prime Minister Vladimir Putin told a conference of the ruling United Russia party on Tuesday in the central city of Nizhny Novgorod, APA reports quoting Xinhua News Agency.

The city is home to one of the largest Russia’s car plants, GAZ.

Putin reminded that in 2009-2010 the state invested 170 billion rubles (5.52 billion U.S. dollars) into national car industry, half of which had been channeled to Russia’s largest automaker AvtoVAZ.

He raised the question of efficiency of those investments, and mentioned that world car industry developed excessive capacities that should be cut.

However, Russia has no excessive capacities with an annual production of 1.5 million cars, Putin stressed..

"It is unclear why Russian car makers must leave the domestic market and Russian workers must be thrown to the street," said Putin as quoted by the RBC news agency.

Putin meanwhile urged the rechanneling of new investments into modernization of car plants.

He admitted that the survival of AvtoVAZ should be attributed to the cash-for-clunkers program and the production of obsolete no-frills Lada sedan designed for low-income people.

Putin said the new cash-for-clunkers program would be extended for 2011. The government allocated another 14 billion rubles (over 455 million dollars) for the program.

He also mentioned that the government will allocate 1.62 million dollars for road repair in all regional capitals in 2010-2011.