"Russians have experience of decline of their currency" - AEB chairman Joerg Schreiber

"Russians have experience of decline of their currency" - AEB chairman Joerg Schreiber

Russian automotive market observers estimate the current unrest created by political turmoil in Ukraine and Crimea could trigger an uptick in sales as consumers look to avoid price rises.

Moscow is currently engaged in a tense stand-off with Western powers reminiscent of cold war tensions, with the Russian currency coming under sustained pressure as the situation continues to remain unresolved.

"It is pretty obvious with the devaluation of the Rouble, some action beyond what we have seen seems to be rather overdue," Association of European Businesses Automobile Manufacturers Committee chairman, Joerg Schreiber, told just-auto from Moscow.

"I would not be surprised if we would see pricing [increases] beyond what we saw at the beginning of the year. This is what customers think and hence the high level of traffic.

"Customers are not stupid - Russians have experience of decline of their currency and they know if something is imminent. Sooner or later, import prices will rise. That is why all those planning to buy a car are rushing to do this now."

Any spike in automotive sales would be a welcome tonic to the Russian market that saw new passenger cars and LCV sales drop 5% last year, although this rallied somewhat in December.

However, the uptick in December sales may have been due to the ending of the car loan subsidy, which, with the milder than usual weather, brought more footfall to Russian dealerships.

"There was some talk at government level such a programme might be renewed, but so far I would not think [so]," said Schreiber. "The budget priorities are slightly different in the environment of a flagging economy."

Last year, sales of new passenger cars and LCVs in Russia reached 2.78m units, 5.5% below 2012 record levels.

The forecast for this year is for 2.73m vehicles.

See also: GENEVA: Ford notes 'downward pressures' for Russia on Ukraine crisis