Car sales are down 38 percent in Russia, and the worst is still to come

Sales of motor vehicles and light commercial trucks in Russia dropped 37.9 percent in February 2015 to just 128,298 cars, according to new data from the Association of European Businesses (AEB).

AEB Chairman Joerg Schreiber says the drop in sales “hasn’t yet bottomed out.” The next few months, he says, will be “very tough” for Russia’s car industry.

“Good macroeconomic news and the stabilization of the ruble give us hope that the situation will improve in the long term, but economic players will need to endure and be patient, until then,” Schreiber explains.

The 37.9 percent drop in motor vehicle sales is a new record for Russia, says the news agency RBC. Previously, the worst month in the history of Russia’s car industry was August 2014, when sales fell 25.8 percent.

“Right now, [Russia’s] automotive industry is entering a phase of rapid deceleration, and February was just the beginning. Experts agree that the next few months will be very tough, and sales haven’t yet bottomed out,” said AEB Chairman Joerg Schreiber.

TASS

• Due to the sharp depreciation of the ruble in November and December 2014, many automakers operating in Russia raised the prices of their cars. In mid-December, when the exchange rate of Russia’s currency reached its local minimum, consumer demand spiked on several car models that were still being sold at old prices. At the time, experts warned that a sharp decline in sales would follow.
• In late February and early March, several automakers (including Ford, Daewoo, and Great Wall) temporarily lowered prices in Russia, due to declining sales.
• AvtoVaz, the largest car manufacturer in Russia, has raised its prices twice already in 2015. According to AEB, the Russian company’s sales fell 23 percent in February to just 23,639 vehicles.