The Association of European Businesses said that Russia’s car market is facing another weak year and is expected to fall by nearly 2 percent in 2014.
Last year, sales of cars and light commercial vehicles fell 6 % to 2.78 million, a reversal from three years of double-digit growth and down from 2.94 million the previous year, according to AEB.
“The year was a mixed one — a complex one — and Russia will remain in second place in Europe in terms of the volume of the auto market,” Joerg Schreiber, chairman of the AEB, told reporters. “I wouldn’t call 2013 a bad year. The outlook for 2014 is a little less than the 2013 result … The majority of our members expect a more stable market and see a chance for [some] segments to grow,” said Schreiber.
The AEB predicted the market would be further hit by stuttering growth in the Russian economy this year and gave a central forecast of 2.73 million deliveries, within a range of 2.64 million to 2.85 million.
Western carmakers including General Motors, Ford Motor, Volkswagen Group, Renault and Fiat Group have invested heavily in Russia, which was on track to overtake Germany as Europe’s largest car market.
The decline in new-car sales last year was reduced by a government loan subsidy program which ran from July to December. The scheme boosted sales in the final month of the year by 4 percent following nine straight months of falls, the AEB said.
Schreiber said some of the manufacturers that had invested in Russia may have rethought the scale of their investments “had they known that they would be dependent on state subsidies.” Manufacturers have now adjusted their production levels in line with the market, Schreiber added.
Via Automotive News Europe