The growth in Russian auto market has weakened no thanks to the current Ukraine crisis, chief executive Dieter Zetsche told Bild am Sonntag. He said that the Russian economy was already struggling before the crisis and now it has “been further impaired." He said that that greatly impacted the Russian passenger vehicle market as well as Daimler’s operations in the country.
Zetsche remarked that while Daimler posted a 20-percent rise in Russian business in the first half of 2014, “the momentum is headed downward." Daimler saw sales of Mercedes-Benz units jump 11 percent in June, according to the Moscow-based Association of European Businesses.
Zetsche remarked that the diplomatic efforts being made by the European Union in Ukraine, including the sanctions, should be supported even if they burden the economy. He told the daily that the economy needs to orient itself to conditions set by the government, regardless of the direct consequences.
The EU recently agreed to impose economic sanctions against Russia, targeting the country’s banking, defense and oil sectors as the country support pro-Russian separatist rebels in eastern Ukraine.
While Germany boasts of extensive trade connections with Russia, Chancellor Angela Merkel has become an advocate of the stiffer measures against the country after an airliner was shot down in eastern Ukraine, leading to death of 298 people on board.
The International Monetary Fund expects the Russian economy to gain by just 0.2 percent this year, even giving a warning that sanctions could have a "chilling effect" on investment in the country. [source: Reuters]