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Russians say 'nyet' to new cars

Friday, January 16, 2015 - 01:58

European car sales return to growth in 2014 - but Russia's were down around 10 per cent, according to new estimates, and the worst may yet be to come. Hayley Platt reports.

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New car sales in Russia are heading the same way as the rouble - down. The latest data shows they could plummet by nearly a quarter in 2015. That's according to the Association of European Businesses - who say the drop would be more than twice the amount they fell last year. Russia's weak economy has been hit hard by a double whammy of falling oil prices and Western sanctions over the crisis in Ukraine. The uncertainty is battering consumer spending, causing many to delay large purchases like cars. Some models could even be forced out of the market altogether. Avtovaz, Russia's largest car manufacturer, isn't one but the falling rouble has prompted a price increase of 9 percent on a Lada. Jeremy Batstone-Carr, is from Charles Stanley. SOUNDBITE (English) JEREMY BATSTONE-CARR, CHARLES STANLEY, SAYING: "The economy is in a very very bad place at the moment and of course the plunge in the currency has made matters significantly worse. I think that Russian consumers are indeed going to have to brace themselves for a few very challenging months ahead." In contrast car sales in Europe moved up a gear in 2014. The number of new cars on the road rose 5.7 percent. Demand was largely driven by low cost autos like Dacia, Skoda and Nissan. The positive data follows six consecutive years of falling sales. Spain saw the biggest increase last year. The UK also enjoyed healthy sales, taking delivery of more than 12 million cars. Whilst Western Europe which includes registrations from Norway, Iceland and Switzerland, got a 5.4 percent boost. There's no guarantee of course that increased sales last year will necessarily be repeated this year. The euro zone is still struggling with low inflation and a stagnant economy. And as for consumer confidence - the jury's still out.

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Russians say 'nyet' to new cars

Friday, January 16, 2015 - 01:58