Russia is a bloodbath market for carmakers, says Renault-Nissan CEO

Article by Christian A., on December 21, 2014

Russia has become a place for a "bloodbath" for carmakers, no thanks to a weakening ruble, according to Renault-Nissan chief executive Carlos Ghosn. He remarked that both Nissan and Renault are not taking orders anymore for some models in Russia, and could even hike the tag for other vehicles if the ruble continues to weaken.

Much worse, a falling ruble is making the Russian auto market shrink further. “It's red ink, people are losing money, all car manufacturers are losing money," Ghosn said. He said that Renault and Nissan are suspending orders on some models until they could see where “this situation is going.”

So far this, the Russian ruble has dropped by around 50 percent against the dollar, placing more pressure to carmakers to sell their products at a higher price while facing lower demand. Carmakers like General Motors, Audi and Jaguar Land Rover have suspended sales in Russia due to the dropping ruble.

As Nissan, it has hiked the prices on half of its offerings in Russia by between 5 percent and 8 percent – like more expensive locally built models that need high levels of imported parts. While Ghosn remarked that he still is confident that the Russian market would "stabilize," the falling ruble made it currently difficult to make longer-term plans.

He, however, noted that the Renault-Nissan alliance is doing better than other carmaker in Russia and is even gaining market share – all thanks to its partnership with AvtoVAZ that protects it from the drop of the ruble.

While combined sales of Renault, Nissan and AvtoVAZ vehicles dropped 8 percent to 682,841 units in the first 11 months of the year, but their market share grew from 29.6 percent to 30.7 percent.

Confident enough, Ghosn is targeting to triple sales in the next three years in Russia, where Nissan, Renault and Lada models account for over a third of vehicles sold in the country.

Lada is a brand of AvtoVAZ, in which Renault and Nissan holds a majority stake. Nissan has seen its sales in Russia surge 10 percent in the first 11 months of 2014 to 141,879 units, while all carmakers have logged a 12-percent fall, according to data from the Association of European Businesses in Russia.

If you liked the article, share on:

Comments

Recommended

One of the executives at Volkswagen tagged in the so-called Dieselgate scandal has pleaded not guilty to a list of allegations surrounding the carmaker’s actions to cheat emissions regulations in...
by - February 27, 2017
When the Crown De Luxe saloon was first released in 1972, it was at that time the most lavish Toyota model available to British customers. Both unusual and exclusive, one...
by - February 27, 2017
The ride-sharing fleet of sharing Lyft Inc. will soon include thousands of specially fitted self-driving Chevrolet Bolt electric vehicles, courtesy of General Motors. If plans push through, Lyft’s clients would...
by - February 27, 2017
J.D. Power has officially released the 2017 Vehicle Dependability Study, an annual list of the most dependable brands in the auto industry. Once again coming on top is Lexus, the...
by - February 26, 2017
Citroen revealed that its entry to the Chinese market is moving forward with the planned release of the new generation C5. While still on sale on this part of the...
by - February 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries