Ford Motor’s Russian venture chief has commented on the sidelines of the latest political and economical developments in the country, warning that the local auto market faces another two years of trouble.
The automotive market in Russia, once mulled to overcome Germany as Europe’s top grossing country, has been troubled by a weakening local currency, and economic slowdown and deepening political troubles triggered by the Ukrainian crisis.
“There is no sign that things will rapidly improve in the next two years,” said Ted Cannis, CEO of Ford Sollers, 50% owned by Ford and Russian automaker Sollers. “To improve the car business, we need interest rates to come down, we would need more certainty in the business climate and the customer climate,” he added.
“Uncertainty in a car business is a big problem – people don’t make big purchases when they are uncertain about the future … The car business is a long business with long pipelines and long investment decisions where continuity and visibility are key,” Cannis continued.
Figures from the Moscow-based Automobile Manufacturers Committee of the Association of the European Businesses show that for the January to August period Russian registrations tallied 1.58 million new passenger cars. That compares to Germany’s 2.02 million units sales for the same period. In August alone, car sales fell 26% year-over-year.