Russia’s car market, which is expected to overtake Germany as Europe’s biggest by the end of the decade, could fall by up to 4% this year, according to the country’s deputy minister of trade and industry.
The country’s US$2 trillion economy has faltered although the forecast is slightly less pessimistic than that given by the Association of European Businesses (AEB), which tracks the Russian car market and recently released data showing that car sales have fallen for four straight months.
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The AEB last month cut its full year forecast to 2.8m vehicles – down nearly 5% on last year – but said it expects government plans to subsidise credit-backed vehicle purchases to boost sales in the second half.
The car market has stalled as the economy slows, with consumers less willing to make large purchases. Russia’s economy expanded by 1.6% in the first quarter – it’s slowest growth since 2009.
The Boston Consulting Group said last week the Russian car market is on track to overtake Germany as Europe’s biggest by 2020 as car ownership increases.
