Russian Car Sales May Drop Second Year on Recession, PwC Saysby
Demand will depend on economy, state support for industry: PwC
Ruble's slide making imported vehicles less affordable: Rolf
Russian car sales may fall another 14 percent next year if the economy heads into a second year of recession, according to PricewaterhouseCoopers LLP.
As few as 1.1 million cars may be sold during 2016 if the slowdown deepens and the government doesn’t support the industry, according to the worst-case scenario of PwC, Oleg Malyshev, a partner at PwC in Russia, said by e-mail. That compares with a projected 1.28 million units sold this year, down 45 percent from 2014.
PwC’s base-case view is that sales will stay at the same level next year. The government plans to allocate 50 billion rubles ($706 million) to support the industry in 2016, RIA news service reported Dec. 2, citing Deputy Prime Minister Arkady Dvorkovich. Demand will be shifting toward less expensive cars, Malyshev said.
Tatyana Lukovetskaya, chief executive officer of Rolf Group, one of Russia’s largest auto dealers, cited the ruble’s slide as another drag on the industry since it raises the cost of imported vehicles. The currency has tumbled 54 percent against the dollar since the start of 2014, including a 17 percent depreciation since January.
“Unfortunately, the dollar exchange rate is going up again, making it harder for carmakers to hold the prices, which may affect sales in 2016," she said.