The Russian auto market could steady down in the second half of this year according to the chief of Ford Motor Co.’s Russian venture after car sales have plummeted there because of a drop in the country’s economy.
After a period with sales growth in excess of 10%, the car sales situation in Russian took a downturn due to a weak economy caused by a collapse in global oil prices but also because of Western sanctions over the part that Moscow played in the Ukrainian crisis. “The market will stabilize, but it will be a very fragile stabilization. I believe July and August will be weaker than June. But there is hope that the situation will improve in the autumn as inflation slows,” said Ted Cannis, CEO of Ford Sollers, which is the American’s carmaker half split joint venture with the Russian automaker, Sollers.
The Association European Businesses announced that sales went down 30% in June compared to the same period last year and that new car sales went down 36% from the previous year, reaching 1.55 million units sold in 2015. Cannis stated for the Russian daily newspaper Vedomosti that a step taken by Ford in April, step to take control of Ford-Solliers was meant to reduce the venture’s exposure to the economic downfall as Ford-Sollers registered a net loss of 5.5 billion roubles in 2014. Despite a devaluation of the rouble which would have helped the Russian venture’s debt, it still needed extra financing because a lot of its equipment was imported.
By Gabriela Florea