Russian car production down by a fifth in April

Russian car production down by a fifth in April
Car production fell by a fifth in april m/m
By bne IntelliNews June 3, 2016

The production of passenger cars in Russia fell by a fifth in April (21.7%) to 96,000 units, according to the state statistics agency Rosstat.

Production of trucks was flat in April y/y, and was equal to 12,000 units. Bus production actually grew a little, up by 7.6% y/y to 3,300 units in April according to Rosstat, cited by Vedomosti.

Earlier it was reported that the production of passenger cars in Russia in January-April 2016 amounted to 345,000 units, which is 25.1% lower than a year earlier.

While the production numbers suggest the worst of the collapse in production is over, the market is now stagnant, says the president of the Russian Association of Car Dealers, Vladimir Mozhenkov. He speculates that everyone who was going to buy a new car has done so and the rest of the population are now waiting to see which direction the economic recovery goes, before making a big ticket retail decision.

The outlook for car production is a lot better than in previous years: the Russian car market is projected to decline by 4.7% to 1.53mn vehicles in 2016 according to Rosstat. PricewaterhouseCoopers' baseline scenario assumes fall to 1.1mn - the lowest since 2005, from which the company is counting.

The current levels of production are on a par with the 2006 level. Demand for cars will probably decline another 4.7% this year to about 1.5mn units after a 36% drop in 2015, the   AEB said.

The government is readying about RUB50bn ($650mn) in state support for the car industry this year on top of the RUB43bn it received in 2015, according to Prime Minister Dmitry Medvedev.