Car sales in Russia down 26% in August image

New car sales in Russia fell 26% in August following a 23% decline the previous month, according to the Association of European Businesses (AEB) lobby group.

The AEB also said that 172,015 new cars and light commercial vehicles were sold in Russia the last month of summer, which is around 60,000 less than in 2013. In the first eight months of this year, the sales in Russia went down 12%, mainly in line with AEB’s predictions for the sales drop this year.

The reasons for the sales decrease are Russia’s weak economy, which has been hit by Western sanctions over the Ukrainian conflict and also the buyers’ delays in making any large purchases.

Joerg Schreiber, chairman of the AEB automobile manufacturers committee, said that a recent announcement from the government regarding an inventive for the scrappage and trade-in of vehicles has raised hopes for the market slide to be stopped.

Schreiber stated that “Whether this will be the case or not depends on how quickly the program will come into effect, so that market participants can finally make use of it.”

The Russian government announced last month that it would earmark 10 billion rubles to fund incentives for new car purchases this year, reviving a program which had previously supported the auto industry during the preceding crisis.

By Gabriela Florea