Government mulling state subsidies to boost sales of locally produced cars

The state will subsidize half of the APR on car loans for Kazakhstan citizens to purchase Kazakhstan-made cars, Tengrinews.kz reports, citing Andrei Lavrentiyev, Head of the Association of Car Making Businesses. According to him, about half of the APR will be subsidized after a borrower has been approved of by a bank as eligible for a car loan. With the APR standing at about 15%, 7% will be subsidized. The state will be sending direct monthly payments to the respective bank. “This measure will be beneficial for domestic car makers, consumers and lenders as sales of domestically made cars are set to grow”, Mr. Lavrentiyev said, adding that the measure is likely to be of short-term character and will only be available for half a year or so. The measure is to be applied to locally produced cars worth within $26 000. Last week the country’s media reported that Albert Rau, Vice Minister of Industry and New Technology, suggested introducing state subsidies to bolster sales of domestically produced cars. He sent a respective request to the country’s PM Serik Akhmetov for consideration. According to him, car production output in the H1 2013 was worth $2.3 billion, with the figure expected to reach $5 billion by the end of the year.