* Government considers help for domestic car makers - PM
* Car sales decline as rouble weakens, economy nears
* Kamaz says July-Aug trend in truck market worrying
(Adds details on truck market, context)
By Maria Kiselyova
MOSCOW, Aug 19 Russia will guarantee $1 billion
of truck maker Kamaz's future debt, as part of a
broader government initiative to support vehicle manufacturers
struggling with falling sales.
Russia, Europe's second-largest car market after Germany, is
seeing a sharp decline in car and truck sales as its weak
economy is put under further pressure by Western sanctions over
the crisis in Ukraine.
Many Russians have also delayed making large purchases
because of a weakening rouble.
Shares in Kamaz, in which Germany's Daimler owns
15 percent, jumped more than 9 percent on the government's
announcement on Tuesday.
"The situation is indeed quite tough. The car market and in
particular the truck market is a very accurate indicator of the
state of (economic) affairs," Prime Minister Dmitry Medvedev
said during a meeting with Kamaz Chief Executive Sergei Kogogin,
according to a transcript on the government website.
"We will of course think how to stimulate this market,"
Medvedev said, without elaborating. In the past, Russia has
supported the industry by subsidizing car loans. It also rescued
its biggest carmaker AvtoVAZ with a more than $1
billion bailout in 2009.
The government said it had approved state guarantees for up
to 35 billion roubles ($968 million) of debt issuance by Kamaz
for up to 15 years. The move is intended to help the truck
maker's investment programme, including launching new models and
upgrading all production lines.
Kamaz, which had net debt of 12 billion roubles at the end
of 2013, approved the issuance of 35 billion roubles worth of
bonds late last year and a further 27 billion roubles in May
2014. It had said it would like the government to back both
"The (first) half (2014) was relatively satisfactory - the
market was falling but we increased our share... But July-August
- there is a high level of watchfulness regarding what's going
on. In my opinion, consumers are simply going into standby
mode," Kamaz's Kogogin said.
He estimated that the truck market was down 18-20 percent,
without specifying the period.
VTB Capital analyst Vladimir Bespalov said Russia's heavy
truck market fell 25 percent in 2013 and is expected to drop by
a further 9 percent this year. However, it may recover next year
thanks to large infrastructure projects, he said.
In July, sales of new passenger cars and light commercial
vehicles in Russia fell 23 percent, year-on-year, according to
the Association of European Businesses, which expects sales to
fall 12 percent this year to 2.45 million.
In January, the government said it planned to support the
industry with subsidies of up to 271 billion roubles in the
three years to 2016, including for research and development, to
support jobs and to compensate for some costs related to meeting
tighter exhaust emission standards.
Also on Tuesday, Kamaz signed agreements with Austrian crane
maker Palfinger AG on setting up two joint ventures in
Russia this year to supply Kamaz and other customers.
(1 US dollar = 36.1620 Russian rouble)
(Editing by Erica Billingham)