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Foreign Car Sales Dipped 15% in Russia
Jan 06, 2009

Global financial crisis impacted the foreign brand cars in Russia, pushing the year-on-year sales to 15% in November 2008.

The Association of European Businesses in Russia said the four year long record (since 2004) broke in November 2008 when the Russian car market witnessed 15% year-on-year decline in foreign branded car sales, as reported by
Forbes.

The sales of foreign models in November 2008 fell short by 23,587 Units against the same month previous year. But in October 2008, the sales were recorded 9% up year-on-year. The foreign car sales in the initial eleven months of 2008 surged 31%, while it rose around 63% in the corresponding period lat year.

Autostat, an analytical agency, said the downfall in foreign car sales pulled down the projected growth of 2008 from 41% to just 31%. Volume sales for 2008 are expected to come down to nearly 2.8 Million from projected 3.2 Million.

Like other international markets, Russian car industry was also not immune to the global financial crisis that negatively impacted the sales. Moreover, the credit market tightened the car loan access, resulting in fall of foreign cars sales. Fear of recession also kept customers away from showrooms.

According to the industry experts, car manufacturers will face low sales in the first half of 2009 because the financial crisis is believed to remain unchanged, in fact deepen. The foreign car sales will further decline as the Russian government has decided to raise the tariff on imported cars.

In addition, in response to depreciation of the Ruble against the Dollar, several auto manufacturers with operating units in Russia have made announcement that they would increase their prices. The price increase is likely to be between 2% and 20% depending upon the brands and models of cars, which, in turn, will affect the sales volume in the country.

According to a Research Analyst at
RNCOS, “Foreign car sales in Russia dropped significantly on account of the current financial crisis. The situation may worsen with the government’s announcement of raising tariffs on imported cars that will make foreign brands unaffordable to many Russians. But it is considered a good news for domestic brands as their demand may pick pace.”

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