Russia September car sales fall 20%, Ukraine crisis hits demand

Russia September car sales fall 20%, Ukraine crisis hits demand

New-car sales in Russia continued their freefall in September with a drop of 20 percent, following a 26 percent fall in the previous month, the Association of European Businesses (AEB) lobby group said in a statement.

Car sales have dropped this year as Russia’s weak economy has been hit by western sanctions over the conflict in Ukraine and people have delayed making large purchases.

The AEB said 197,233 new cars and light commercial vehicles were sold in Russia in September, about 50,000 less than a year ago.

In the first nine months, sales were down 13 percent to 1.78 million, largely in line with the AEB’s forecast for the sales drop in 2014 as a whole.

Despite September’s sales drop, the AEB remained optimistic that a recently-introduced government scrappage scheme will help lift sales during the rest of the year.

“Until year end, the negative sales trend should be mitigated somewhat as a result of government measures in support of domestic vehicle production,” Joerg Schreiber, chairman of the AEB automobile manufacturers committee, said in the statement.

The Russian government said in August it would earmark 10 billion rubles (€207 million) to fund incentives for new vehicle purchases this year, reviving a program that had supported the industry during the previous crisis.

In September, the only carmaking group to make gains in Russia was Mercedes-Benz Cars, whose sales of Mercedes cars, vans and Smart minicars rose 13 percent.

AvtoVAZ-Renault-Nissan, the biggest carmaking group in the market, saw sales fall 11 percent in September, followed by No. 2 Volkswagen Group, whose deliveries tumbled 24 percent.

Sales of third-placed Hyundai fell 10 percent, while Toyota, the fourth best-selling automaker in Russia sold 1 percent fewer cars in September. Sales of No. 5 Kia dropped 19.5 percent.

Both General Motors and Ford were particularly badly hit in Russia last month as sales plummeted 43 percent and 35 percent respectively.