May 8, 2018 / 2:56 PM / a year ago

Russian car sales soar in April as buyers try to beat price hikes

MOSCOW (Reuters) - New car sales in Russia jumped 17.6 percent in April from the same month a year before, as consumers anticipating that rouble weakness will push up prices hastened purchases, the Association of European Businesses (AEB) lobby group said on Tuesday.

Russia’s car market has been recovering after sales fell sharply during an economic downturn that was exacerbated by 2014’s plunge in prices for oil, the country’s main export, and by Western sanctions.

The annual pace of sales growth picked up from 13.9 percent recorded in March, taking the number of new cars sold in Russia in the first four months of 2018 to 545,345, AEB data showed.

“The noticeable weakening of the rouble exchange rate in recent weeks has been an extraordinary factor motivating customers to accelerate the purchase of a new car in anticipation of potential price increases,” Joerg Schreiber, Chairman of the AEB Automobile Manufacturers Committee, said.

The rouble RUBUTSTN=MCX has shed nearly 9 percent of its value versus the dollar since the United States imposed new sanctions on prominent Russian businessmen and their companies in early April. It traded at 63.33 per dollar on Tuesday.

Russian consumers usually interpret rouble depreciation as a sign that prices for cars, which are mostly built from imported parts and materials even when assembled locally, will rise, as happened after the rouble’s steep decline in 2014-2016.

“New vehicle orders have spiked as a result, and will continue to materialize as extra good news in the sales statistics in the short term,” Schreiber said in a statement.

Last month, AEB said it expected sales of new cars and light commercial vehicles in Russia to rise by 10 percent in 2018, to 1.75 million units.

In 2017, Russian car sales totaled 1.6 million units, up 11.9 percent from the previous year, but still only around half the nearly 3 million units sold in 2012 when the market was booming.

Reporting by Anastasia Lyrchikova and Andrey Ostroukh; Writing by Andrey Ostroukh; Editing by Catherine Evans

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