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Russian car sales down 58.8% in 2022 as sanctions hit industry hard

Friday, January 13, 2023
Russian car sales down 58.8% in 2022 as sanctions hit industry hard © Reuters. FILE PHOTO: Cars wait at the traffic lights in Kaluga, Russia March 30, 2022. Picture taken March 30, 2022. REUTERS/Evgenia Novozhenina
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MOSCOW (Reuters) -Car sales in Russia collapsed by 58.8% in 2022, the Association of European Businesses (AEB) said on Thursday, as the industry reels from the impact of Western sanctions on Moscow.

Several Russian auto makers suspended production for periods of last year as the industry struggled to source parts and establish new supply chains following the imposition of the sanctions over Moscow's military actions in Ukraine.

"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 auto manufacturers such as Renault (EPA:RENA) also left the market, making the industry - previously heavily reliant on Western investment and high-tech equipment - one of the hardest hit by the fallout from the conflict.

At one point major manufacturer Avtovaz was selling Lada cars without airbags or anti-lock braking systems (ABS) due to parts shortages.

Prices for cars have also risen significantly in Russia - a fact which remains the main "deterrent" to a sales rebound, Kalitsev said. Retail sales slumped across the Russian economy in 2022 amid a recession, price instability and heightened uncertainty.

Total car sales for the year came in at 687,370, compared to more than 1.6 million in 2021, the AEB said. In the month of December, sales were down 50.2%. The figures do not include sales of BMW, Mercedes-Benz and Chery brands.

The industry body forecast that sales would climb by 12% in 2023 to around 770,000 vehicles. Kalitsev said he expected 5-7 new car brands could appear on the Russian market this year, without providing details.

"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.

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    DAX 17,423.23 ↑ Sell  
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    Hang Seng 16,482.00 ↑ Sell  
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    IBEX 35 10,138.40 Sell  
    BASF 46.330 ↑ Buy  
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    Allianz 245.65 Neutral  
    Adidas 188.20 Neutral  
    Lufthansa 7.237 ↑ Buy  
    Siemens AG 174.90 ↑ Buy  
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