By Andrey Ostroukh
MOSCOW--A drop in sales of new cars in Russia slowed slightly in
April, data showed Wednesday, in what industry officials said could
be a sign that the market has finally begun to bottom out.
The Association of European Business Automobile Manufacturers
Committee said that the number of new cars and light commercial
vehicles sold in Russia in April fell by 41.5% to 132,456 cars. In
March, sales plummeted by 42.5%, its fastest pace in more than five
years.
Car sales have been declining rapidly since December when a drop
in the ruble to record lows prompted people to park their savings
in durable goods. As the ruble recovered and stabilized recently,
the slowdown in the contraction of car sales appears to chime with
the Kremlin's claim that the worst of the current economic and
financial crisis is over.
April's figures are still below those of 2009 at the height of
the financial crisis. AEB Chairman Joerg Schreiber said: "The
similarity to 2009, the year of the Lehman crisis, demonstrates the
severity of the present situation. The dynamics of the current
crisis, however, are different...this time the government responded
much earlier with selective countermeasures meant to avoid an even
deeper fall."
Facing economic contraction and double-digit inflation, the
Russian government decided in March to subsidize car loans and
finance car purchases for state bodies in a bid to support the
market. The move was designed to prop up sales of cheaper cars as
well as government vehicles.
The AEB data shows that government support has so far had little
impact on sales of mass-market models. Ford sales dropped 48% on
the year in April, Peugeot sales were down by 76%, and Lada sales
shrank by 38%.
The car market remains difficult in April, said Svetlana
Vinogradova, manager at one of dealerships with Rolf, one of
Russia's biggest car dealers, despite many brands lowering
prices.
According to official data Russian retail sales, which reflect
the strength of consumer demand, fell in the first three months of
this year as real wages contracted.
Luxury brands, whose buyers appear to be less sensitive to the
economic problems but eager to spend their devaluing rubles, saw
much stronger demand. Sales of Porsche rose 12% in April and
increased by 37% in the first four months of 2015. Lexus enjoyed a
5% rise in sales in April, while sales of Mercedes-Benz vans rose
by 19%.
The AEB said it doesn't expect car sales to deteriorate much
further. Certainly the economic outlook appears fairer. Earlier
this month, MNI Indicators research firm said its consumer
sentiment indicator rose in April, recovering from an all-time low
seen in March. And long-term expectations for business conditions
improved following the recent ceasefire in Ukraine, while rate cuts
by the Bank of Russia also supported sentiment.
As in previous months, all of Russia's top 10 best-selling
passenger cars in April were produced in the country, the AEB
said.
Write to Andrey Ostroukh at andrey.ostroukh@wsj.com
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