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UPDATE 2-Car sales seen recovering in Russia in 2017: industry group
January 12, 2017 / 11:28 AM / 8 months ago

UPDATE 2-Car sales seen recovering in Russia in 2017: industry group

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By Jack Stubbs and Gleb Stolyarov

MOSCOW, Jan 12 (Reuters) - Car sales in Russia look set to rebound this year, rising by 4 percent to 1.48 million units if the state maintains support for the sector, the Association of European Businesses (AEB) lobby group said on Thursday.

Presenting its forecast at an event in Moscow, the AEB said 2016 had been a tough year. But it saw slightly improved sales data for the fourth quarter as signalling a potential recovery in 2017 after four consecutive years of shrinkage.

“We expect growth, finally. Small (growth), but growth,” said Joerg Schreiber, chairman of the AEB Automobile Manufacturers Committee, citing signs of recovering oil prices and global economic activity.

After a decade of annual sales growth in excess of 10 percent, Russia’s auto industry has become one of the most high-profile casualties of an economic crisis fuelled by lower oil prices and Western sanctions over Moscow’s actions in Ukraine.

Sales tumbled 11 percent year-on-year in 2016 to 1.42 million units, the AEB said, and the number of cars sold in one month hit a 10-year low in April. Sales in December fell 0.9 percent to 146,000 units for the month.

The AEB had previously forecast Russian car sales would fall slightly less -- by 10.3 percent to 1.44 million units. PricewaterhouseCoopers had predicted only 1.1 million cars would be sold.

Nicolas Maure, CEO of market-leader Avtovaz, said Russian car sales could increase by as much as 5 percent in 2017, helped by state support measures and improved economic growth.

“I would say that by the end of April we will have some view on the real trend,” he told reporters.

“Very good news is that the Russian government has confirmed the extension of a fleet renewal programme and loan subsidising. This is excellent because it is clearly contributing to a huge portion of the market volume.”

Representatives for Korean automaker KIA and American car giant Ford’s Russian venture, Ford Sollers , said they saw 2017 sales rising by up to 5 and 10 percent respectively.

Russia’s auto market showed some signs of recovery towards the end of last year, with sales in November posting their first monthly increase in almost two years.

But it has a lot of ground to make up. Russia was once forecast to overtake Germany as Europe’s biggest car market, but slipped to fifth place last year.

“The market as a whole is still lacking positive momentum, but apparently is in the process of finally establishing its bottom,” Schreiber said. (Reporting by Jack Stubbs and Gleb Stolyarov; Writing by Andrew Osborn; Editing by Christian Lowe/Ruth Pitchford)

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