“If the national mass transit system places orders for new rolling stock with home-based plants, leading business companies of Russia will be kept busy for years. The economic crisis leaves no room for the importation of foreign-made vehicles,” said Prime Minister Vladimir Putin during his visit to the biggest truck-maker of Russia, KAMAZ. He was referring to the problems of the mass transit system, the communal facilities, as well as the health care and educational centers of Russia. Cities and towns of Russia need thousands upon thousands of motor vehicles. If home-based producers fail to attend to their needs, foreigners will be quick to cut in. And foreign attempts to fill this empty niche have already been reported – especially in big urban areas. Municipal orders for domestic vehicles are what it takes to change the situation.

Igor Korovkin of the Russian Car-Makers’ Association does not support the policy of investing in industrial production because plants have investment programs of their own. He advocates investment in the consumption of industrial goods. In his view, the market is shrinking because of suspended loans and leasing programs and – most importantly – the inability to upgrade the mass transit system. Some time ago, the budgets of municipal governments left room for the purchase of city buses. Now, they do not. Korovkin says, the bus market has shrunk. People have to use old buses. Today’s problems are rooted in the age of municipal vehicles. Plants are crying out for customers that can take a lease on, say, city buses. If you want five-year-old vehicles to be fit for competition, you have to invest money. That is why Korovkin calls for the extension of loans and sees hope in leasing programs and supporting municipal organizations that use vehicles. He says his ideas boil down to government orders, which may be increased for the purpose of supporting the manufacturers.

As many as 20 billion roubles of federal budget money will be allocated in 2009 for the modernization of the municipal vehicle fleet. The regions and municipalities are expected to chip in with 10 billion roubles. Twenty billion plus ten billion makes for more than a billion U.S. dollars. It goes without saying that Russian buses must be able to compete with foreign-made vehicles. They must cost less. Russian plants have already started making motor vehicles that meet the European standards of environmental protection. City buses commonly known as LiAZ meet the European standards in full measure and are ordered for big urban areas. Smaller PAZes are used as school buses in different parts of Russia. One of their modifications is meant for the Arctic region.