Russia: auto decline lingers, but slows pace in November image

The country’s auto sales – once seen capable of overshadowing the top European market of Germany – have slowed their continued decline, falling just 1% last month – after the 10% drop accounted in October.

The country’s troubled auto business has seen double-digit increases until 2013 – the year when the weaker economy and lower valuation of the local currency led to a 5% overall drop. But 2014 could prove much worse, as to the economic uncertainties added the political tensions stemming from the conflict in Ukraine, the Western economic sanctions and the lower price of oil (which is one of the primary sources of money for Russia). Fortunately for the ailing market, customers last month rushed to buy new cars because of expected price increases and the state has backed the industry with a governmental scrappage incentive deal.

According to the Association of European Businesses (AEB) lobby group, in November the sales amounted to 229,439 new cars and light commercial vehicles. While the Western sanctions continued to take their toll on the economy, the state has pledged 10 billion rubles ($186 million) in September to fund the new car purchases through the end of the year. Also, last week the government decided to continue the scrappage program through 2015, earmarking another 10 billion rubles.

Via Automotive News Europe