On the car loan market is lower interest rates

Artem Lavrishchev, Analyst, Equity Investment Bank KIT Finance, in an interview Bank.ru talked about the main challenges and opportunities for the car loan market in Russia. In your opinion, how feasible and effective in serving the government program of preferential car loan? Tell us about the pros and cons of this program? The state program of preferential car loan started work in April 2009. The total amount set aside in the budget for 2009 is 2 billion rubles, while the total for 2009-2011 are 6 billion rubles. During the first three months of working through this program was purchased about 10-12 thousand cars, 80% of whom were in cars of LADA. Recall that the state compensates participating banks 2 / 3 CBR refinancing rate. Initially, the list of cars available for preferential programs has been limited by cost (not exceeding 350 thousand rubles.), And lending institutions were represented only by the State Bank (Sberbank, VTB 24 and RSKHB). In this case, the buyer was obliged to make an initial contribution of at least 30% of the value of the car and repay the loan until the end of 2011. Nevertheless, the interest rates banks were still high - an average of 18-20% per annum, which is almost 2 times higher than pre-crisis level. The program is slowly gaining momentum, so the government decided to make an extra boost in late June, has improved conditions - has expanded the list of available vehicles at the expense of passenger commercial transport, has increased the price threshold to 600 thousand rubles., Reduced the required down payment from 30% to 15% and increased the term repayment of up to 3 years. It is also expected to expand the list of participating banks by commercial banks, private capital is not less than 70 billion rubles. We believe that the program will gradually gain momentum and as a result, virtually the entire budget will be chosen, which will sell about 100 thousand cars in 2009. In general, we believe that the market for new cars will fall to 1.6-1.7 million vehicles, up 50% less than last year. How have credit conditions in this segment during the crisis? Taking into account the policies of the Government and the Bank of Russia, average rates on loans in Russia has been gradually declining. If at the beginning of the year rates on car loans reached 20-35% per annum, then fly them to the level dropped to 14-18%. In addition, many manufacturers have started to deploy their own (or jointly with banks) loan program - the rates for these programs ranged from 0% to 12% (manufacturer thus offers a discount on a car). Of course, many private banks in the crisis simply shut down the direction of car loans, so it was logical that the market share of state banks over the last year has increased substantially. What are the main problems in our auto industry? The main problem automakers - the fall in demand. The first half of 2009 the market of new cars fell by 2 times compared to last year. Lack of sales, resulted in an emergency stop conveyors (to avoid overstocking of products). Expenditures exceeded revenues - as a result the company began to work at a loss, even at the operating level. It is no secret that the automotive industry - is strongly zakreditovanny sector. However, significant risk is that the debt of companies for the most part, short-term, in the absence of positive cash flow does not allow them to service it. Is there now any positive changes on the car loan market? Positive trends in the market is auto loans: lower interest rates, expansion of the state program of preferential car loan, start producing their own lending programs. On this subject see also the interview with the vice president of the bank VTB 24, the Head of Aleksey Tokarev car loans, the deputy chief of the Department of Retail Sales ZAO Opening Sergey Kostyukov and development expert lending programs of the company "ITC Auto RUS", the official importer of Suzuki Motor Corporation in Russia, Nikolai Koronovskii.