By Andrey Ostroukh
MOSCOW--Demand for new cars dropped sharply in Russia in January
from the same month last year, pummeled by shrinking consumer
spending and soaring prices for imported goods as the ruble has
plummeted in value against major currencies.
Combined sales of cars and light trucks fell 24% to 115,390
vehicles after a 2.4% rise in December from the same month a year
earlier, the Association of European Businesses said Monday.
Russians had rushed to dealerships to buy vehicles before the
New Year ahead of a widely expected jump in prices triggered by the
fall in the ruble. Declining oil prices have hit Russia's
energy-export dependent economy hard.
The weak Russian currency has pushed up prices for imported cars
while pressuring local manufacturers reliant on imported components
to raise their prices to cover costs.
"If December was a big party for many market participants, then
January is the equivalent to a bad hangover," said Joerg Schreiber,
Chairman of the AEB's Automobile Manufacturers Committee. "The
peculiarity of the current situation is that 2014 model-year stocks
at lower prices are practically sold out, much earlier than usual,"
Mr. Schreiber.
Prices for newly registered cars have risen much more than usual
too, he said. "The price transformation of the market is something
still in process, so the headache will rather get worse before
going away eventually," Mr. Shreiber said.
With oil prices remaining not far from record lows and western
economic sanctions still in place amid the continuing crisis in
Ukraine, the outlook for the Russian economy and the auto industry
remains cloudy.
"Macroeconomic instability will continue to determine the
complicated situation in the car industry in 2015," consultancy
firm PwC said in a presentation of its Russia outlook Monday.
Nissan Motor Co., which with French partner Renault SA controls
Russia's biggest auto maker AvtoVaz, warned on Monday that it would
turn in lower-than-expected growth in vehicle sales for the year to
end-March partly because of the weak Russian market.
Avtovaz, the manufacturer of Lada cars, said at the end of last
month that it would cut 1,100 people from its workforce in a bid to
steer back to profitability during a slowdown in the Russian
economy. Last year, Avtovaz slashed its workforce by 12,000 to its
current level of around 50,000.
Write to Andrey Ostroukh at andrey.ostroukh@wsj.com
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