Russian Car Sales Plunge in 2016


Russian passenger car and light commercial vehicle sales are expected to plunge 16 percent to about 1.35 million units in 2016, the countrys automobile dealers association projected, which will likely deter sales of motor oils.

Light vehicle sales in Russia have been sliding since March 2013, Vladimir Mozhenov, president of the Association of Russian Automobile Dealers (which uses the acronym Road), said during a press briefing in Moscow this week. We still havent hit the bottom, and one can consider the 1.3 million mark a fair result. What should be of a bigger concern for us is the drop in sales by vehicle segments.

The association expects low sales in the mass and premium passenger car segments. In the first half of 2016, sales in the mass segment – which encompasses brands such as Chinas Lifan and Chery; the United States Ford; Japans Suzuki; and Russias Uaz – dropped 15 percent compared to the same period last year. Sales in the premium segment dropped by 8 percent, Mozhenov said. This segment includes brands such as Alfa Romeo (Italy), Lexus (Japan), Jaguar (Great Britain) and Cadillac (U.S.).

In the first half of the year, sales in the mass segment amounted to 572,000 units, while in the premium segment the result was 70,000 units, according to the Moscow-based Association of European Businesses.

Overall, Russian car sales plunged by 36 percent in 2015 to about 1.6 million units – primarily due to the national economys second year of recession, which was fueled by international sanctions and low oil prices, according to the AEB.

Road found that the plunge in new car sales in turn has boosted the used car market. Last year, 9 percent of cars sold by dealers were pre-owned, compared to only 5 percent a couple of years ago.

As new car sales in the country halved compared to a couple of years ago, fewer car models were imported in Russia in 2015, Mozhenov said. In 2014, the country imported 500 new car models, while this number now is 300 models.

Road appealed for immediate state subsidies for the automotive industry, claiming it could face disaster. We could see more and more dealership centers closing and falling car sales that could further plunge to about 1 million to 900,000 units in 2017, Mozhenov said. When entrepreneurs and investors in car dealerships opened their ventures in Russia a decade ago, their projects were based on national sales of 3 million cars annually, a result now we can only dream about.

As the Russian automobile market faces its worst times in recent years, the countrys motor oil consumption is falling too. Autostat, a Moscow-based analytical agency, recently told an industry event that it expects the slowdown in sales of engine oils for passenger cars and commercial vehicles to continue well into 2016.

Photo: Oleg Doroshin / Shutterstock

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