Russian consumer confidence is bounding back ahead of the 2018 World Cup

Russian consumer confidence is bounding back ahead of the 2018 World Cup

Russia has posted "remarkable" growth in January with sales of new passenger and LCVs soaring 31% - the fastest rise since 2011.

Admittedly from a low-base, the country has nonetheless consistently powered back with many consecutive months of improved sales, which have coincided with a steady increase in the price of oil.

Russia is uniquely dependent on its energy sector with oil and gas accounting for a huge percentage of its exports and giving The Kremlin some wriggle room as it approaches Presidential elections next month.

The automotive sector has been in Moscow's cross-hairs for some years as it provided specific aid packages to stimulate the industry such as easing access to credit and incentive schemes, which have seen numbers rebound almost unchecked for nearly a year.

Last month saw sales of new cars and light commercial vehicles in Russia increase by 31.3 % compared with January, 2017 or by 24,428 sold units, amounting to 102,464 cars, according to the AEB Automobile Manufacturers Committee (AEB AMC).

"A strong start for the Russian car market in 2018," said AEB AMC chairman, Joerg Schreiber. "Partly owed to a low prior-year base, the 31% headline growth in January is remarkable in the sense it is the largest year-on-year improvement in a single month since 2011.

"Positive sales momentum can be expected to continue in the short term, although likely at a somewhat dampened pace.

"Customers are responding well to the current product and price offerings, aware of the fact that 2017 model year incentives are limited as the sell-out of respective dealer stocks is progressing faster than in recent years."

Despite economic sanctions imposed by Western countries critical of Moscow's involvement in Crimea and Eastern Ukraine, Russian consumer confidence appears to be rebounding after a period of contraction, with some sources also speculating inflation could dip to 2% later this year.

The imminent World Cup will also see Russia thrust firmly on to the global stage as the tournament takes in major cities from Kaliningrad to Ekaterinburg and Nizhny Novgorod to Sochi, providing the country with a positive image after years of disagreement with the West.