Russia’s January Sales Slump May Set Pace for Year
Sales of several premium models increased in 2014, but even that segment is not expected to avoid this year’s gloomy outlook as the ruble continues to lose value and interest rates climb.
Russian car sales fell 15.3% year-over-year in 2014 and could slump 24% this year, as foreign automakers have suspended exports of at least 20 brands to the country, a business organization reports.
About 2.6 million cars were sold last year in the country, according to WardsAuto data. The decline would have been greater if not for a 1.4% uptick from prior-year in December, attributed to a sharp depreciation of the ruble.
January deliveries slumped 23.6% from like-2014, in line with the full-year forecast, and tumbled 57.8% from December.
The premium segment was less affected by the economic crisis in 2014, when sales of several brands increased, including Mercedes-Benz (49,100 units, up 11% from prior-year), Land Rover (21,100, up 1%) and Lexus (19,100, up 21%).
But even premium brands are not expected to avoid this year’s gloomy outlook as the ruble continues to lose value and interest rates increase. Western economic sanctions have had only an indirect effect on sales, says Joerg Schreiber, chairman of the Association of European Businesses Automobile Manufacturers Committee.
The group predicts 2015 new-car sales will not exceed 1.89 million units, while Vladimir Mozhenkov, head of the Association of Russian Car Dealers, says deliveries may fall to 1.5 million units, a level comparable to the crisis year of 2009.
Foreign automakers have suspended imports of models including the Peugeot RCZ, Renault Laguna Coupe, Chrysler 300C, Land Rover Defender, Chevrolet Malibu, Subaru Impreza, Skoda Roomster and Hyundai Genesis Coupe.
Global automakers’ assessments of the Russian market vary.
Honda’s Russian subsidiary, which does not operate a plant in the country, has no plans to reduce exports but is considering raising prices. The inflation rate could reach 30%, says Mikhail Plotnikov, head of sales and marketing.
Toyota, meanwhile, saw its share of the Russian market increase to 6.5%.
Dealers are feeling the brunt of the sales collapse. Vladimir Mozhenkov, vice president of the AutoSpecCentre dealer group, says showrooms during the first two weeks of January “were completely empty.” As many as 600 of the country’s 4,500 dealerships could close this year, he says.
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