AEB Cuts Russia 2016 Car Sales Forecast After First-Half Slump

The contraction of Russian car sales in 2016 will be double previous forecasts after weak performance in the first half, according to the Association of European Businesses.

Sales of new cars and light commercial vehicles will contract by 10.3 percent in 2016 to 1.44 million units, the Moscow-based association said in a statement Friday. The previous forecast was for a decline by less than 5 percent to 1.53 million vehicles. Sales fell 14.1 percent to 672,140 in the first half of the year.

“This forecast implies a slowdown of the negative trend in the second half of 2016, to a level of 6 percent to 7 percent or half of what we have seen so far this year,” Joerg Schreiber, chairman of the AEB Automobile Manufacturers Committee, said in the statement.

Russian car sales have been declining for 18 months amid shrinking consumer demand. The reduced forecast suggests automakers don’t expect households to step up big purchases until at least next year as the country struggles to exit its longest recession in two decades.

Sales dropped 12.5 percent in June from a year earlier, better than a median estimate of 16 percent among 5 analysts in a Bloomberg survey.

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