Russian Auto Sales Drop 83.5% in May

Cars drive along a highway in Moscow, Russia, May 17, 2017 with Moscow International Business Center also known as “Moskva-City” in the background. REUTERS/Maxim Shemetov

June 6 (Reuters) – Car sales in Russia plunged 83.5% in May to another historic low, the Association of European Businesses (AEB) said on Monday, as Western sanctions have decimated Russia’s auto industry with parts shortages and spiralling prices.

Russia sent troops to Ukraine on Feb. 24, and sales of new cars have been falling since March as sanctions blocked main supply chains. Last month, only 24,268 vehicles were sold, AEB said. A year earlier, sales were six times greater.

Top western carmakers led by Renault (RENA.PA) either suspended operations or left Russia since sanctions took effect. The country’s car industry depends on global supplies, and the shortage of parts has shrunk production volumes several times since Feb. 24.

According to Russian statistic agency Rosstat, car prices have jumped nearly 50% since the start of the year, slamming demand in a country where household incomes have declined while inflation has been hovering near 20-year highs.

AEB did not provide a forecast for the Russian auto market performance this year. In April, it forecast new car sales in Russia to fall by at least 50% in 2022.

Reporting by Reuters Editing by David Goodman and David Gregorio

Source: Reuters