Russia's car sales decline continues in November at 6.4%

Russia's car sales decline continues in November at 6.4%
Russian car sales in 11M19 declined by 2.8% year-on-year to 1.58mn vehicles says AEB / bne IntelliNews
By bne IntelliNews December 6, 2019

Sales of new passenger cars and light commercial vehicles (LCVs) in Russia continued its decline, decreasing by 6.4% in November 2019, according to the report by the AEB Automobile Manufacturers Committee overseeing the industry. In 11M19 overall car and LCV sales declined by 2.8% year-on-year to 1.58mn vehicles.

As reported by bne IntelliNews, the car market has been struggling to recover this year. After hopeful pickup in 2018, the recovery has stalled and sales have failed to gather any momentum.

"With over 6% volume loss, November sales confirmed the prevailing negative trend in the Russian car market this year," the head of the AEB Joerg Schreiber commented.

"Of course, the year-on-year comparison should consider the strong sales in the latter part of the previous year, on the back of the anticipated VAT increase. For exactly the same reason however we do not expect to see a trend recovery in December," he added.

Among the top ten bestselling models so far, all models are still locally produced in November. However, the bestselling model of Russia's largest car maker AvtoVaz took hit for the second month in a row with 7% y/y decline in November, while managing to maintain narrow growth of 1% in 11M19 overall.

"After 13% growth in 2018 the market is not in the best shape," UralSib analysts commented on December 6, expecting the decline to continue in December due to high base of 2018.

Previous car sales reports had VTB Capital analysts slash the car market growth forecast from previous 6-7% to 0.3% for 2019, while AEB warned that the "market growth in the full year of 2019 is not a realistic scenario anymore."

Moreover, recent reports also claimed that Russian car market could be shrinking faster than the industry data suggests, with a real decline in car sales at 18% in May 2019 if accounted only for actual sales by the car dealers.