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Russia Car Sales Rise at Slowest Pace in 15 Months, AEB Says

Updated on

Aug. 8 (Bloomberg) -- Russian sales of new cars and light commercial vehicles rose 27 percent in July from a year earlier, slower than the previous month’s 40 percent growth, the Association of European Businesses said.

Sales totaled 224,620 vehicles, led by 50,518 units for OAO AvtoVAZ’s Lada brand, the AEB said today in an e-mailed statement. Overall growth for the first seven months was 50 percent, putting Russia on target to sell 2.45 million autos this year, more than the previous forecast of 2.35 million.

“The expected pattern of strong but slowing growth continues into the second half,” David Thomas, chairman of the AEB’s automakers committee, said in the statement.

Last month, the government said it had distributed the final 600,000 certificates in its so-called cash-for-clunkers rebate program, which allowed Russians to receive 50,000 rubles ($1,724) toward the purchase of most locally made cars. The program helped sales rise 30 percent last year, according to the AEB.

Tolyatti-based AvtoVAZ, Russia’s largest carmaker, added to declines after the statement. Its shares fell as much as 12.5 percent before pairing losses to close down 10 percent at 24.369 rubles. Sales declined 3 percent in July from a year earlier, the AEB said, bringing year-to-date growth to 25 percent.

Sales at General Motors Co.’s Chevrolet brand advanced 76 percent in July, while Renault SA, which owns a quarter of AvtoVAZ, boosted sales 57 percent, the statement said.

Russia may become Europe’s largest automobile market by the end of this decade, reaching 4 million vehicles a year, provided “global growth can overcome the present uncertainty,” Mark Ovenden, the committee’s deputy chairman, said in the statement.

To contact the reporter on this story: Scott Rose in Moscow at rrose10@bloomberg.net.

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net.

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