Hopes December’s sharply improved figures were a portent of better times to come in Russia, have been severely dented by January’s data showing passenger car and LCV sales slumping nearly 25%.
It had been thought exchange rate depreciation and the extension of a scrappage scheme could inject real dynamism into a moribund market that posted dramatic sales falls for most of last year, but numbers from the AEB Automobile Manufacturers Committee (AEB AMC), paint a starkly different picture.
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The scrappage boost saw sales rise in Russia by 2.4% in December compared with the same period last year, but even that modest increase has been dashed with the latest numbers.
Russia is at the centre of a political and economic maelstrom many say is of its own making, following the annexation of Crimea and huge instability in Eastern Ukraine, which has seen enormous pressure on the rouble and major capital flight as spooked investors take fright.
AEB AMC chairman, Joerg Schreiber, pulled no punches in delivering his own gloomy assessment of the situation, which has led General Motors for example, to halt production at its St Petersburg plant for two months.
The company temporarily suspended wholesale deliveries to dealers in December, citing the volatility of the rouble exchange rate.
“If December was a big party for many market participants, then January is the equivalent to a bad hangover,” said Schreiber. “The peculiarity of the current situation is 2014 model year stocks at lower prices are practically sold out, much earlier than usual.
“At the same time, responding to currency movements, prices for the new model year have increased, much more than usual. The price transformation of the market is something still in process, so the headache will rather get worse before going away eventually.”
AEB figures show in January 2015, sales of new cars and light commercial vehicles in Russia decreased by 24.4 % compared with the same period last year or by 37,272 sold units, amounting to 115, 390 cars.
All top ten bestselling models of passenger cars are produced in Russia.
The situation could even take a turn for the worse as even more punitive sanctions planned by the European Union and the US against Russia in retaliation for its alleged involvement in Ukraine, could be implemented.
Western countries are holding the threat of sanctions over Moscow ahead of talks between them, Russia and Ukraine in the Belarus capital of Minsk tomorrow (11 February).
