* Lobby group sees 2014 sales at 2.73 mln units on average
* Last year's sales fell 5.5 pct
* Automakers bullish on market long-term
By Megan Davies
MOSCOW, Jan 15 Russian car sales fell in 2013
and face another weak year as a stuttering economy puts off
buyers, dealing a blow to western automakers that have invested
heavily in the country on the expectation it would soon become
Europe's biggest car market.
A lobby group for Europe's top carmakers said on Wednesday
sales of new cars in Russia fell 5.5 percent last year, bringing
three years of double-digit growth to an abrupt end.
It also predicted the country would continue to lag European
market leader Germany for now.
"Russia will remain in second place in Europe in terms of
the volume of the auto market," Joerg Schreiber, chairman of the
Association of European Businesses (AEB) auto association, said
at a news briefing.
Car and light commercial vehicle sales are expected to fall
by 1.6 percent in Russia in 2014, the AEB said, giving a central
forecast of 2.73 million units within a 2.64-2.85 million range.
"(It's the) general economic situation, if you look at other
consumer goods - white goods etc - everything went down," said
Schreiber. "Now all hinges on - is there still consumer appetite
A Reuters poll last month showed economists expecting
Russia's economy grew just 1.4 percent last year, less than half
of their forecasts a year earlier, due to weak investment and
tapering consumer demand.
They predicted growth of 2 percent for this year, against
the government's forecast of 2.5 percent.
DEPENDING ON SUBSIDIES
The decline in car sales last year was reduced by a
government loan subsidy programme which ran from July to
December. The scheme boosted sales in the final month of the
year, with December sales up 4 percent following nine straight
months of falls, the AEB said.
Auto executives, resolutely bullish that Russia's rising
middle class will support sales long-term, do not predict
another crisis, but are worried about an extended contraction in
Western carmakers including General Motors, Ford
, Renault and Fiat have invested heavily
in Russia. Schreiber said some of the manufacturers that bet on
Russia may have rethought the scale of their investments "had
they known that they would be dependent on state subsidies".
Manufacturers have now adjusted their production levels in
line with the market, Schreiber said.
"Everyone has shrunk to a state of reasonable healthiness
and now are waiting for what the New Year will bring," he said.
"Should demand go up, I'm sure manufacturers will be in a
position to quickly replenish."
Dealerships have felt a heavy blow from the falling sales
and have seen their income hit as they offered larger discounts
and increased their marketing spend to lure customers, he added.
VTB analyst Vladimir Bespalov said the AEB's figures showed
a stabilising market, with the 2013 decline slightly above his
forecast for a 6 percent drop. He is predicting a one percent
increase in car sales for 2014.