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Face Off: Cash for Clunkers – Russia to follow the US lead!

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The Cash for Clunkers initiative proved to be a mega hit in the U.S. since the masses made the most of it and replaced gas-guzzling autos with cleaner and more fuel-efficient vehicles. Since the federal initiative allowed the not-so-serious recyclers to think seriously about it, it made them eco-conscious. Now, the same contagion has hit Russia as the Industry and Trade Ministry plans to replace fuel-inefficient vehicles with improved Russian-made cars. Russia is trying to go emission-free but it’s not that easy.

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It will be harder to implement this type of scheme in Russia.

Though Ivan Bonchev, the head of Ernst & Young’s automotive unit in Russia, is apprehensive about the outcome, a successful implementation of the policy might see 30 million Russian cars replaced by the likes of Ford, GM and Volkswagen. However, it still remains to be seen whether it benefits the recyclers or the auto makers.

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