Russia: Market could drop by 20% in 2014

Lada Granta in Kazan, Tatarstan, Russia – September 2013

After reaching record levels in 2012, the Russian car market dropped by 5% in 2013. It seemed to have stopped its fall over the first Quarter of 2014 but April sales showed an 8% decline, potentially handicapped by the economic sanctions imposed on the country as a result of the Crimean crisis. However things could get much worse for Russian new car sales this year, with a 20% drop over the Full Year 2014 now mentioned by two separate entities. This would actually mean a 27% drop over the rest of the year…

First to cite the -20% figure, LMC Automotive is now joined by AvtoVAZ (aka Lada) CEO Bo Andersson. According to Automotive News, Andersson said in an interview at the St Petersburg International Economic Forum that the next two years will be “tough” for the Russian market. Interestingly, Andersson said he expects AvtoVAZ’s sales to fall less than the industry, by 10 to 15%, allowing the carmaker, which is controlled by Renault-Nissan, to increase market share to 20% in 2016 from 17% now. For now though, AvtoVAZ is down 15% in a market down 4% year-to-date…

But most interestingly of all, Andersson gives ‘slower economic growth’ as the reason for the 20% decline, saying the sanctions imposed on companies, officials and businessmen close to President Vladimir Putin by the United States and the European Union after Russia’s annexation of Crimea haven’t contributed to the downturn so far…