Sale Of Russian Cars Plummet By 58.8% In 2022 Due To Sanctions

Car sales in Russia will fall by 58.8% in 2022, according to the Association of European Businesses (AEB), as the industry grapples with the impact of Western sanctions on Moscow.

Following the imposition of sanctions over Moscow’s military actions in Ukraine, several Russian automakers suspended production for periods last year as the industry struggled to source parts and establish new supply chains.

“The issues with sanctions and unprecedented pressure on the Russian market on all fronts, of course, could not but affect the automotive industry,” the head of the AEB’s automobile committee, Alexey Kalitsev, told a briefing.

High-profile Western automakers such as Renault also exited the market, making the industry, which was previously heavily reliant on Western investment and high-tech equipment, one of the hardest hit by the conflict’s fallout.

Due to parts shortages, major manufacturer Avtovaz once sold Lada cars without airbags or anti-lock braking systems (ABS).

Car prices have also risen significantly in Russia, which remains the main “deterrent” to a sales rebound, according to Kalitsev. Retail sales fell across the Russian economy in 2022 as a result of a recession, price volatility, and increased uncertainty.

The AEB reported that total car sales for the year were 687,370, compared to more than 1.6 million in 2021. The month of December saw a 50.2% decrease in sales. The figures do not include BMW, Mercedes-Benz, or Chery sales.

According to the industry body, sales will increase by 12% to around 770,000 vehicles in 2023. Without going into specifics, Kalitsev predicted that 5-7 new car brands would enter the Russian market this year.

“With a favorable combination of circumstances … growth above 12% is also possible. But no one in the world can predict anything in the current situation,” he said.

(Adapted from Nasdaq.com)



Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy

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