The Russian car market is currently experiencing a crisis, and the pain is being felt more by carmakers that have more stakes in the country. One of carmakers is Renault, who along with Nissan controls AvtoVAZ, the largest vehicle manufacturer in Russia. But with Russia planning to launch an incentive scheme to boost demand and having more local suppliers, Renault could find itself benefitting from the situation.
Renault, Nissan and AvtoVAZ are just some of the carmakers unveiling new models at the Moscow auto show this week while increasing tensions between Russia and the West have led to a significant drop decline in Russian car sales.
While not dismissing possible production cuts if the slump continues, Renault's Russia chief Bruno Ancelin said he is not planning to review or postpone vehicle development, as he believes that a prior move to invest in 2009 was justified when Russia transformed into one of the carmaker’s most profitable markets in the next years.
"Now isn't the time to make bad decisions not to do things," Ancelin told Reuters in an interview. He said that when the market is disrupted is the best time to invest.
The Russian car market posted a 10-percent drop so far this year, and things are expected to get worse after a passenger plane was shot down over Ukraine, triggering new Western sanctions against the country’s banks and oil sector. LMC Automotive is expecting car sales in Russia to drop 15.8 percent in 2014, instead of the 10.5 percent previously projected.