Sales of new passenger cars in Russia in January-February 2010 decreased by 34% compared with the same period last year, according to the Association of European Businesses (AEB).

The Russian government this week launched its version of the popular U.S. "Cash for Clunkers" program as part of efforts to boost car sales, which fell by 49% in 2009.

"It is encouraging to see a further move in the right direction, 32% decline in February compared to a 37% decline in the much smaller month of January. However the first months of 2009 were heavily distorted so it will only be once we have the full quarter-one figures that an accurate picture of the market and the impact of government measures can be gained," said David Thomas, the chairman of the AEB Automobile Manufacturers Committee.

The 32% year-on-year decline in February represented total sales of 91,922, against 73,940 in January, the AEB said in a press release. Last February saw sales of 134,871, with 118,024 units sold in January 2009.

Russian car dealers started issuing the "disposal premiums" on Monday. The money is provided to those ready to have their 10-year-or-older car scrapped under the new scheme, and buy a new one from an Industry and Trade Ministry-compiled list of over 60 Russian and foreign car brands produced in Russia.

Of the 10 top-selling vehicles, nine were produced in Russia, including the best-selling Lada Priora. Only the Renault Logan, at No. 3, and the Daewoo Nexia, at No. 9, increased sales over the first two months of last year, by 31% and 13%, respectively.

The rebate program may take some time to have an effect, however, as Industry and Trade Minister Viktor Khristenko said a mere 153 disposal stations had been licensed so far, and it could take until September to get the scheme running smoothly.

The government has set aside 10 billion rubles ($370 million) for the program, which runs until November 1 in 49 of Russia's 83 regions.

MOSCOW, March 10 (RIA Novosti)