Vehicles sales in Russia slid 10 percent in October, marking a less steep drop in domestic deliveries compared to the decline in September thanks to a weaker Russian ruble and the government’s scrappage program, according to the Association of European Businesses.
The AEB disclosed that sales of new cars and light commercial vehicles were 211,365 last month as consumers continue to forego large purchases due to a current economic slump. AEB committee chairman Joerg Schreiber, however, said in a statement that while the Russian auto market’s performance last month was “anything but great,” it is a step forward compared to the very weak results in months prior.
He attributed the improvement to the combined effect of the scrappage incentive and the sharp decline of the Russian ruble. The Russian current has drop nearly 30 percent against the dollar so far this year.
The Russian government also launched another program giving cash incentives of at least RUB40,000 (EUR752) for Russians to sell their old cars for scrap or trade them and then buy a new one.
According to AEB, while the effect of the weaker ruble and the scrappage program would be temporary, they still could drive further sales improvement this month. Sales of new cars and light commercial vehicles dropped 13 percent in the first ten months of 2014 to 1.99 million units.
The AEB is expecting a 12-percent fall in full-year sales to 2.45 million, as the program is seen to slow down the rate of decline.
While most major carmakers also see smaller declines in October, sales were flat at AvtoVAZ-Renault-Nissan, which just fell 0.1 percent. On the other hand, Volkswagen Group suffered from a 16 percent in October.