MOSCOW, Jan 20 (Reuters) - Car sales in Russia could drop by 25 percent to 50 percent in 2009 as the global financial crisis squeezes demand, erasing two years’ rapid growth, auditing company PricewaterhouseCoopers (PwC) said on Tuesday.
“The falling availability of loans, growing unemployment, slower personal income growth, the devaluation of the rouble -- all taken together these factors could lead to a contraction in sales this year of 25-50 percent,” said Stanley Root, a partner at PwC in Moscow.
In separate research, the Association of European Businesses (AEB) has forecast a 19 percent fall in foreign car sales in Russia during 2009, calling this an optimistic scenario.
The slowdown in Russia’s automotive market began in October 2008, when many banks were forced by the credit crunch to stop giving affordable car loans.
Before the onset of the crisis, Russia was poised to become the largest car market in Europe in 2009, giving car makers hope of offsetting the losses they face in the West. Those hopes were frustrated in the fourth quarter of 2008.
Russian demand for foreign cars dropped 15 percent year-on-year in November and 10 percent in December, leading to full-year growth of 25 percent, down from 61 percent in 2007, the AEB said.
“The car market in Russia (for 2009) will return to levels seen two years ago, that is, in 2006,” Root told reporters.
Last year, 3.2 million automobiles -- worth a total of $69 billion -- were sold in Russia. A 50 percent decline implies sales of 1.6 million units in 2009, while a 25 percent drop implies sales of 2.3 million units.
Many global carmakers in Russia have been forced to slow or halt production at their local factories. General Motors GM.N, Ford Motor Co. F.N and France's Renault RENA.PA all said they were idling their Russian assembly lines late last year.
U.S. automotive giants GM, Ford and Chrysler [CBS.UL] -- known as the Detroit Three -- have all been badly battered by the crisis and have turned to the government for a bailout. (Reporting by Anton Doroshev; Writing by Simon Shuster; Editing by Andrew Macdonald)
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