The country has been called to increase its efforts in turning around the collapsed automotive industry, with the nation’s lobby group signaling long-term weakness after the latest sales results.
After years of double-digit growth that attracted massive investments the Russian auto market plummeted last year because of the economy woes brought by the local currency weakness – all triggered by the sliding oil prices and the western sanctions stemming from Russia’s implication into the Ukraine crisis. Joerg Schreiber, chairman of the Automobile Manufacturers Committee of the Association of European Businesses (AEB) said the recent programs introduced by the government – a car-scrappage plan and loan subsidies – were necessary to avoid massive drops and don’t look sufficient to be able to restart growth on their own. “After a cumulative volume loss of 36 percent in the first half of the year, the July result of minus 27.5 percent looks almost like a piece of good news,” commented Schreiber. “In reality, what we are seeing is mostly the low-base effect of a poor market showing in the corresponding period last year.”
Russia’s sales last month dropped 27.5 percent year-on-year to 131,087 units, said the Moscow-based AEB. The association also decided last month to lower its full year sales guidance for new vehicle registrations to 1.55 million units – 36 percent lower than last year. The AEB data showed the mass-market brands, which should be the primary beneficiaries of the government help, had declines of around 20 percent or more. Meanwhile, premium brands were better – Porsche jumped 19 percent and Toyota’s luxury arm Lexus was up 5 percent.
Via Automotive News Europe