The number of new and used cars sold in Russia plunged 55% in the first half of 2009, and could end up falling 60% by the year’s end if the state does not act fast, PricewaterhouseCoopers (PwC) said on Tuesday.
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Once forecast to become the largest market in Europe this year, Russia is now facing one of the worst years in its history and its value has plunged 62% in the first half of this year to US$12.8bn, PwC said, according to Reuters.
Heavy job losses and salary cuts have forced many Russians to delay auto purchases, while many banks have refused to give them affordable car loans due to the global credit drought.
“The negative effects of the global automotive crisis have been among the most serious for Russia,” Stanley Root, PwC’s automotive analyst in Moscow, told the news agency. “The development of the market will depend to a large extent on government efforts to revive it.”
The state has tried to boost auto lending by offering to compensate banks for lowering the price of their loans, but many analysts have said the incentives are too meagre to create a turnaround.
PwC said the 55% decline brought total sales to 743,000 cars for the first half of 2009, including 345,000 imported vehicles, 190,000 locally made foreign models, 200,000 Russian models and 8,000 used foreign models.
For the full year, total sales are expected to come to between 1.3 and 1.6m vehicles, a decline of between 50% and 60% on last year, PwC said.
