Forecasters at IHS Automotive have downgraded their forecast for vehicle sales in Russia this year as a result of the economic effects of the geopolitical crisis in Ukraine.

Russia’s car market has been in decline as the country’s economy has stalled, in part a reflection of developments in world energy markets. The Russian light vehicle market declined by 10% in 2013 and was recently forecast by the Moscow-based AEB to drop by a further 2% this year to 2.73m vehicles.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

IHS noted that things could be made much worse if economic sanctions are imposed on Russia. “All the current negative developments in Russian economy (rouble depreciation, inflation, lack of investments and capital outflow) will accelerate by possible sanctions from Western countries and organisations as a result of the dispute between Ukraine and Russia,” it said.

IHS also said that it will downgrade its light vehicle sales forecast for Russia. “For our base line we will slightly reduce our forecast from -3.8% market decline in 2014 (January Forecast) to -7% (March Forecast).”

IHS said that in the base scenario “we consider the implementation of intense diplomacy to resolve the Crimea conflict and some easing of the situation immediately after new presidential elections in May 2014.”

In its “pessimistic scenario” involving prolonged armed conflict in the region and implementation of sanctions against Russia, IHS said that Russia will suffer not only from sanctions “but also from deterioration of its image as a country to invest to”.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

According to the pessimistic outlook, IHS said the light vehicle market in Russia will fall 10% this year and post a negative growth rate next year too.