Russian bus manufacturers will receive government support

Russian bus manufacturers will receive government support

Vedomosti – Russian bus manufacturers will receive government support. 3 billion rubles have been allocated for the renewal of school buses throughout the regions of Russia, within the frame of a federal programme in 2016, as announced by the Ministry of Education and Science on Tuesday. The aforementioned sum is sufficient for the supply of 1860 buses, according to the calculations of the officials. The deliveries will have completed in 73 regions, by 15 September. Thereby, the government is prepared to spend an average amount of 1.6 million rubles per bus. For comparison: while it’s possible to buy a PAZ-32053-70 school bus for 1.6 million rubles, a GAZ 3221 microbus (school bus) costs 1 million rubles.

NefAZ (KAMAZ affiliate), UAZ, Ford Sollers, Daimler, Volkswagen and other companies manufacture buses in Russia, alongside GAZ Group.

Following a period of stabilisation (1.3% growth within the first half of the year, according to ASM-Holding data), the Russian bus market has shrunk steeply during the last three months (see the graph), therefore the Russian bus manufacturers need government support, comments VTB Capital analyst. GAZ is the biggest bus manufacturer in the country. 77% of the revenues of GAZ Group came from bus and LCV sales to external customers in 2015, according to International Financial Reporting Standards. The loss of the company amounted to 1.92 rubles in 2015.

The government has already launched a few support programmes for Russian bus manufacturers: utilisation of the park (22.5 billion rubles allocated for 2016), subsidy of the purchases of gas-engine buses and equipment for housing and public utilities (3 billion rubles), amongst others.