Car sales in Russia forecasted to dip 12% in 2014 image

After new car sales in Russia slipped no less than 17.3 % in June over the same period last year, the Association of European Businesses (AEB) moved to forecast that deliveries would drop 12% overall this year.

The lobby group for Europe’s top automakers said the recent months decline in the country has accelerated, after a 5.5% slide last year abruptly ended three years of continuous double-digit gains. While Russia was not long ago seen as a promising contender to match or overtake Germany for sales leadership in the region, the recent developments have actually made analysts slash their earlier predictions to more pessimistic figures.

“The market continues its downward trend, at an accelerating pace,” said Joerg Schreiber, chairman of the AEB Automobile Manufacturers Committee (AMC). “In the opinion of AMC member companies, the market weakness has not reached its bottom yet.”

According to the Association of European Businesses, the 12% drop in sales of cars and light commercial vehicles in Russia would mean a total of 2.45 million units, a far worse tally than was envisioned just a few months ago, when the AEB projected an overall slip of just 1.6%.

Russia’s economy has started to show signs of weakness since last year, promptly followed by the car sales decline, while this year the political tension with Ukraine added Western sanctions on Russia, further impacting consumer confidence.

Via Reuters