Russian Car Sales to Turn Corner to Growth After 4-Year Drop

Updated on
  • Market starting to recover as recession ends: business group
  • Car sales may gain 4% this year after dropping 11% last year

Russian car sales are set to return to growth in 2017 after a four-year slump as the economy shows signs of reviving.

Sales of new cars and light commercial vehicles may rise by about 4 percent to 1.48 million units this year after dropping 11 percent in 2016, Joerg Schreiber, chairman of the automakers’ committee of the Association of European Businesses, told reporters Thursday in Moscow.

“There is a delayed demand for cars" after declining real incomes led many people to put off large purchases, Schreiber says. “A stabilized ruble rate, higher oil prices: all this is boosting consumer confidence, which was down for two years.”

Russia is emerging from the worst recession in two decades after prices for oil, the country’s main export earner, rebounded and the ruble stabilized against the dollar. The economy is set to grow in 2017 after shrinking the past two years, with retail sales and incomes forecast to expand, according to the Economy Ministry.

Car sales fell to 1.43 million vehicles, bringing the cumulative decline since 2012 to more than 50 percent, according to data from the AEB. In December, the number of units sold dropped 1 percent from a year earlier after adding 0.6 percent in November, the first increase on that basis in any month since December 2014.

(Updates with economic outlook in fourth paragraph.)
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