AEB says, Russia car sales to drop 24%

AEB says, Russia car sales to drop 24%

Russian car sales are likely to drop by 24 percent this year after falling 10 percent in 2014 as the country heads for recession, an automakers lobby group forecast.

New car and light commercial vehicle sales are set to decline to 1.89 million vehicles from 2.49 million last year, Joerg Schreiber, the chairman of the Association of European Businesses automobile manufacturers committee, said today at a news conference in Moscow.

Last year’s drop eased in November and December as consumers rushed to buy big-ticket items as the ruble collapsed, Schreiber said. December sales rose 2 percent to 270,600 vehicles, according to the industry group’s data.

The ruble plunged more than 40 percent last year in Russia’s worst currency crisis since 1998. Carmakers have slowed production and raised prices in response.

High interest rates will probably hold down car sales this year, and the ruble exchange rate remains a headache for automakers, Schreiber said. He said some car models may be forced out of the market, but declined to name which.

Car sales have fallen victim to Russia’s weak economy, hit by Western sanctions imposed on Russia over the Ukraine crisis and low oil prices.

Lada, Russia’s top-selling brand, saw sales decline by 15 percent in 2014. Sales at No. 2 Kia fell by 1 percent. Volume at Nissan, Russia’s third best-selling brand, grew by 11 percent. Major Western brands suffered large drops with Ford down 38 percent, Opel 20 percent, Chevrolet 29 percent, Volkswagen 18 percent and Renault 7 percent. Toyota’s volume rose by 5 percent.