Demand slowdown in Russian car market worries carmakers
Slowdown in the once favoured Russian car market is heightening concerns among the global car makers who are already under great strain due to rising costs and weak economy.
The falling oil prices, mainstay of Russian economy, and stock market turmoil have created ripples in the car manufacturing industry.
The slowdown has started gripping Brazil, China and India, which were so far helping car makers in making up for the loss of sales in Japan, US and Western Europe.
Analysts are forced to review their sales estimates for the Russian market, which bought 2.5m cars last year and was going to overtake Germany as the largest car market of Europe.
According to Central and Eastern Europe’s sales analyst Carol Thomas at J.D. Power & Associates Consultancy, carmakers’ confidence in the Russian market would be severely hit if oil prices continued to rise.
The year on year basis of car sales in Russia, during July, fell to 16% from 22% on account of the Georgian conflict and other economic factors.
Last month also witnessed a steep fall of 9.3% in sales in the buoyant car market of central European countries including Czech Republic and Poland, as reported by J.D.Power.
General Motors’ Chevrolet and Ford’s Focus are the top selling brands in Russia, while Renault owns shares in Avtovaz.
However the London-based CSM Worldwide did not foresee Russian market to fall as badly as the European markets.
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