A steep drop in Russian’s automotive market in October image

Due to a slow economy and stop of the government scrappage program, car sales in Russia have decreased by 38,5 percent in October.

From the beginning of the year, the automotive market in Russia is on a downward slope. Last month, the sales dropped by 38,5 percent compared to the same period of last year, after a 29 percent decline in September. In the first ten months, 1.32 million cars were sold, a 34 percent decrease. According to Automobile Manufacturers Committee in Russia, 129,958 units were sold in October. An important factor in the high pace in the market’s decline is the suspension of the government scrappage & trade-in program, originally introduced in September last year, which it has a serious negative impact over retail demand. Another major factor is the decline of the Russian economy, which it contracted by 3.8 percent in the first nine months.

The low demand in Russia’s automotive market is forcing automakers to cut costs, therefore they have to adjust the production volume. The biggest Russian car manufacturer, AvtoVAZ admitted that might stop the production for a few weeks next month. Also, Nissan plans to cut 500 employees from its St. Petersburg plant next year, while Ford Sollers will hold production for two months at its plant in Vsevolozhsk. All major automakers’ sales had declined in October: Lada, the market leader, dropped by 46 percent, Renault with 35 percent, Toyota deliveries fell 48 percent, Nissan was 49 percent down, while GM’s sales dropped by 70 percent as the company pulls its Opel and mainstream Chevrolet models from the market.

Via Automotive News