January 14, 2019 / 10:42 AM / 6 months ago

New car sales in Russia seen slowing in 2019: AEB

Cars are seen stuck in a traffic jam on Westen High-Speed Diameter in Saint Petersburg, Russia December 3, 2018. REUTERS/Anton Vaganov

MOSCOW (Reuters) - Sales of new cars in Russia are expected to rise 3.6 percent this year to 1.87 million, marking a slowdown from last year’s surge, the Association of European Businesses (AEB) lobby group said on Monday.

New car sales in 2018 rose 12.8 percent year on year, while the number of new cars sold in December was 5.6 percent higher than in the same month the year before, AEB said.

The market is unlikely to keep up last year’s double-digit growth because of uncertainties stemming from this year’s VAT hike to 20 percent and the threat of the United States imposing new sanctions on Russia, the lobby group said.

Automakers warned last year that the plan to raise VAT would hit car sales, which had started to recover from four years of stagnation.

The group said that strong prior year sales would hamper a strong start in 2019, while it was also unclear what kind of support measures, if any, the government might pursue.

The group said it saw “better chances for growth again in the second half, as fundamental market demand should be robust enough to offset uncertainty.”

Reporting by Gleb Stolyarov; Writing by Tom Balmforth; editing by Louise Heavens

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