Russia’s remarkable run of surging sales came to something of a halt in January with a slender rise of just 0.6%.
After years of decline, the Russian market has powered back with impressive results, albeit from a very low base, but it appears the numbers may be starting to stutter as a 2% VAT increase kicks in.
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Fears are growing Western European economies may be stalling with Italy now in recession, as well as reports even Germany could be slowing markedly, with the effect possibly now being mirrored across the Ural Mountains.
In January, 2019, sales of new cars and light commercial vehicles in Russia increased by 0.6% compared to January, 2018 or by 600 sold units, amounting to 103,064 cars, according to the AEB Automobile Manufacturers Committee (AEB AMC) based in Moscow.
“Automotive sales stayed above 100,000 in January with a minor growth of 0.6% compared to the same month last year,” said AEB Automobile Manufacturers Committee, Joerg Schreiber.
“This is a positive outcome, especially considering the 2% increase in VAT implemented by 1 January. “
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By GlobalDataCumulative sales in 2018 reached 1.801m units, a 12.8% increase compared to the prior year. However, the outlook for 2019 is not so straightforward estimates the AEB, with consumer tax increases and a possible tightening of US sanctions creating what it terms “significant risks and uncertainties” for market performance..
“With this in mind, our 2019 full year prediction for sales of passenger cars and light commercial vehicles in Russia is a moderate improvement to 1.87m units, or by 3.6% compared to the prior year,” noted the AEB.
Russian consumer confidence is often linked to the price of energy and as the country produces such vast quantities of it, this frequently trickles down to purchasing decisions.
Oil in particular this year has seen barrel prices fluctuate wildly from more than US$80 to hovering at around US$60 today.
Some analysts have estimated Russia’s break-even price for oil to sustain government financial stability to be a minimum of US$48.
