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. Last Updated: 07/27/2016

Fewer Russians Want Domestic Autos

Russians increasingly prefer foreign cars to domestic ones, a study released Tuesday found, indicating that government measures to encourage demand for domestic autos have yet to kick in.

The share of respondents who said they would rather buy a foreign car has grown to 49 percent, from 39 percent in 2006, while preference for domestic brands slid from 54 percent to 22 percent among people planning a purchase in the next few years, according to state pollster VTsIOM.

Half of Russians who are in the market for a car said they planned to spend less than $20,000. While the share of demand in this segment fell to 50 percent, from 75 percent in 2006, the share of people who don't know how much they are willing to spend increased to 40 percent from 20 percent, as turbulent prices and changing economic conditions unsettle the market.

The poll also suggests more trouble ahead for Russia's beleaguered auto sector, which has had major production stoppages this year and is struggling to remain financially viable.

The government increased tariffs on imported used cars in January by as much as 200 percent, depending on the age and engine size, and it has said it will subsidize car loans on some domestically produced models.

The 2 billion ruble subsidies plan was supposed to be unveiled by March 9, but so far no details have emerged.

Despite the government's efforts to steer demand toward new domestic models, consumers' preferences have gone in the opposite direction. Only 12 percent of respondents to the poll, conducted in February, said they would buy a new Russian car, down from 35 percent three years ago. Used foreign cars were the most popular choice (25 percent), second to new foreign cars (24 percent).

Domestic production in the first two months of the year was 65,100 cars, a 68.9 percent drop year on year, the State Statistics Service said Monday. February production however, was 60 percent higher than January's, when most of the country's plants went on an extended winter break.

While many brands have established Russian production sites, consumers continue to prefer cars made abroad to those made in Russia. Forty percent of respondents think an imported foreign model is of higher quality than that of foreign models made in Russian plants. Only 11 percent thought there is no difference in quality.