Slightly sunnier outlook for Russia as market only dips 30% in June

Slightly sunnier outlook for Russia as market 'only' dips 30% in June

Russia's Association of European Businesses (AEB) says a fall of 30% in new car and LCV sales for June is "less dramatic" than previous months, but is still forecasting a year-end figure down 36% to 1.55m.

Last month, sales of new cars and light commercial vehicles in Russia decreased by 29.7 % compared to June, 2014 or by 59,237 sold units and amounted to 140,161 cars, according to the AEB Automobile Manufacturers Committee (AEB AMC).

This year in January-June, 782,094 cars were sold.

"No reason to relax whatsoever, but it's worth noticing the pace of year-on-year volume drain in June is less dramatic than in the preceding months since February," said AEB AMC chairman, Joerg Schreiber.

"Matters could be much worse, if not for two policy-driven factors supporting the market in the right direction: 1) the ongoing reduction in base interest rates, as the door opener for a successful reanimation of credit-financed demand, and: 2) the continuing and recently increased government support to buyers of new cars, by ways of subsidising interest rates or the renewal of older and very old cars.

"Having said this, market sentiment for the remaining six months of the year remains muted.

"Based on a recent member poll, the AEB updates its full-year forecast for 2015 to 1.55m passenger cars and light commercial vehicles, equivalent to a 36% reduction from [a] 2014 actual result of 2.49m."

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