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. Last Updated: 07/27/2016

Carmakers Cut Interest On Loans

General Motors signed an agreement with four Russian banks to provide consumer loans for its cars at lower interest rates, the company said Monday, in a move to lure back customers to the flagging market.

The program will work through June with Sberbank, Alfa Bank, Raiffeisenbank, and UniCredit. Chevrolet, Opel, and Saab buyers will be able to apply for car loans with interest rates of 4.9 percent, General Motors said in a press release Monday.

Russia is the second-largest market for GM Europe, the European arm of General Motors, which is facing a June 1 deadline to convince the U.S. government that its restructuring plans are sound. Sales of foreign cars in Russia were down 40 percent year on year in March, and carmakers are looking for ways to lure back consumers, many of whom have been scared away by sky-high interest rates.

The company is following in the footsteps of rival Ford, which unveiled a new auto-financing program late last month. Ford's Focus made it onto a list of models approved for government interest rate subsidies. The government program, introduced in April, subsidizes two-thirds of the refinancing rate on auto loans for cars that are less than 350,000 rubles ($10,590).

Ford, in partnership with Rusfinansbank, Gazprombank, Raiffeisenbank, UralSib and UniCredit Bank, is extending the same subsidized interest rate to all of its Ford Focus and Ford Mondeo models, many of which are above the government's cutoff price. The program will run to June 30.

Rusfinansbank, which is owned by Societe Generale and specializes in car loans, is also participating in a lending program designed for the Lada that is partially financed by AvtoVAZ.

A representative of UralSib, which has also partnered with AvtoVAZ in the program, said interest rates on Ladas will be lowered to between 6.9 percent and 10.9 percent from 21 percent, Vedomosti reported Monday.