"I'd like to say straight off that budget money, the funds of natural monopolies and, I hope, the largest private companies should be spent on buying domestically produced products," Vladimir Putin said.
"Now that our producers are forced to slash production, I think it is absolutely unacceptable to spend money on acquiring foreign cars," he said, specifying that Russian-made cars included foreign cars assembled in Russia.
The Russian government's commission on anti-dumping measures in foreign trade proposed in November raising import duties on used foreign cars to 30% from 25%.
Putin also said the government should allocate an additional 12.5 billion rubles ($450 million) to buy motor vehicles for the social sector, police, and rescue services in a bid to support the domestic auto industry.
Meanwhile, Russia's national development bank VEB is considering granting loans worth 17 billion rubles ($616 million) to three domestic carmakers and producers of auto components.
The VEB chairman, Vladimir Dmitriyev, said on Friday that the Yaroslavl Diesel Engine Plant had requested an 11 billion ruble loan ($398 million), Sollers, which produces Fiat, Isuzu, SsangYong and UAZ cars in Russia, was asking for more than 4.5 billion rubles ($163 million), and Russia's largest truck-maker, KamAZ, wanted 1.5 billion rubles ($54 million).
General Motors has three production sites in Russia. The U.S. company has a JV with Russia's largest carmaker AvtoVAZ that produces Chevrolet Niva SUVs in Togliatti, and its plant in Kaliningrad, Russia's exclave on the Baltic, assembles Chevrolet, Cadillac and Hummer cars. It opened the third site in St. Petersburg in early November.
Ford and Renault are also among the foreign brands manufactured in Russia, while Japan's Toyota also opened a plant in St. Petersburg last December, and Hyundai, Suzuki and Nissan are currently building production facilities in the northwestern city.
