Page 98 - RUSRptApr17

Businesses (AEB) that oversees the industry.
This caused January-March to close with 1% y/y gain in sales, marking the first quarter of growth on Russian car market in four years.
“Finally, the sales trend on the Russian car market is moving in the right direction,” AEB head Joerg Schreiber commented on the release, but adding that “more solid month results will be needed before we can call this a robust trend”.
All ten of the top selling models in March were domestically produced. Sales of Russia's largest car maker AvtoVaz increased by 13% in the reporting month and by 8% in the first quarter overall.
Avtovaz is currently finalising the second stage of recapitalisation from its major shareholders , among them French carmaker Renault that supported Avtovaz generously in the past two years while hoping for a market turnaround.
In February, Avtovaz's iconic Lada model was back as Russia’s best selling car as cash-strapped Russians trade down to cheaper models.
AEB previously said Russia’s car market has the potential to end a four-year period of decline and to return to moderate growth in 2017 with 1.48mn vehicles sold, or 4% y/y above the 2016 result. In 2016, sales of new cars in Russia declined by 11% to 1.42mn units.
International business consultants PwC predicted that Russia’s car sales will increase in 2017 for the first time in several years to 7% year-on-year.
9.1.3 Aviation sector news
Government funding for Russia's aviation industry through 2025 will be cut by 12% to RUB632.6bn (€10.6bn), Interfax reported on April 6. According to the report, Prime Minister Dmitry Medvedev has signed a decree correcting the aviation funding programme, previously adopted for the 2013-2025 period. With corrections taken into account, RUB241.5bn is to be allocated for airplane manufacture and RUB14.37bn for helicopter manufacture. Despite the cut in funding, the programme stipulates a gradual increase in the proportion of locally-manufactured planes in major Russian air carriers' fleets to 12.9% in 2017, 21.3% in 2021 and 27.2% in 2025.
The Russian government has proposed a rule that will force airline to set up a de facto reserve fund , by regulating a the minimum size of the authorized capital of the airlines. The reserve fund can be used to cover arrears of wages in case of bankruptcy of the carrier. But the size of the requirements for the authorized capital has not yet been established. And even if the rule is put in place for the leaders of the industry it will be measured only by hundreds of millions of rubles as their authorised capital is actually small. The proposal is with the Federal Air Transport Agency, but expers don't believe the scheme can be made to work.
A modernisation programme for two airports in Russia’s Arctic region of Murmansk will cost RUB280mn (€4.6mn) and take five years to implement, TASS reported on April 24. According to the report, the Khibiny airport in
98 RUSSIA Country Report April 2017 www.intellinews.com