Russia’s deputy Minister of Trade and Industry predicts that auto market in the country will fall 4% by the end of this year.
The Minister’s forecast is better compared with the one made by the Association of European Businesses (AEB), according to which auto sales in Russia have dropped for four months in a row. In June, the AEB reduced its full-year forecast to 2.8 million vehicles, down almost 5% compared with 2012, but said that it relies on the government’s strategy to subsidize credit-backed car purchases aimed at increasing sales for the rest of the year.
“We will see a fall of 2, maybe 4, percent (in overall 2013 sales),” deputy minister Alexei Rakhmanov said, adding that the state programme of interest subsidies on car loans should support the market.
Automakers such as Ford, GM, Fiat and Renault have made massive investments in Russia, confident that Europe’s second-biggest auto market will become profitable thanks to the country’s rising middle class.Unfortunately, the market stalled as economy is affected by the financial crisis and consumers avoid making big purchases. During the first quarter Russia’s economy increased 1.6%, the slowest increase since 2009.