MOSCOW — President Vladimir Putin urged the Russian authorities on Wednesday to manage automotive costs, as one trade head mentioned Western sanctions may ship annual gross sales crashing to under 1 million for the primary time since data started.
Auto gross sales have fallen over 60% to date this 12 months, and should find yourself being lower than 1 / 4 of what they have been a decade in the past, in keeping with Maxim Sokolov, head of Russia’s high carmaker Avtovaz.
A few of this 12 months’s drop is as a result of pullout of overseas carmakers equivalent to Renault and Mercedes-Benz and a collapse in demand resulting from a mass mobilization for the Ukraine battle.
However a lot can also be resulting from falling residing requirements and better costs, in addition to the issue of securing foreign-made elements after the imposition of a barrage of sanctions by Western international locations in response to Russia’s army marketing campaign in Ukraine; the newest Lada mannequin has needed to be produced with out airbags or anti-lock brakes.
Talking with high officers, Putin acknowledged that the state of affairs was “not straightforward,” and requested the federal government to have a look at making automobiles extra inexpensive, suggesting that costs have been being raised unfairly.
“I want to draw your consideration to the necessity for fixed management over pricing, in order that below these difficulties, of which we’re all conscious, together with logistics, nobody abuses or unreasonably raises the costs of street autos,” he mentioned.
“I hope that each you and the Federal Antimonopoly Service are doing this on a regular basis.”
‘Essentially the most troublesome state of affairs’
Commerce Minister Denis Manturov informed Putin that meeting strains have been being ramped up at Russia’s home carmakers — together with Avtovaz, maker of the Lada and a Renault subsidiary till Might, GAZ, Kamaz and UAZ.
Portray a rosy image, he mentioned manufacturing of the Moskvich (“Muscovite”), a Soviet-era model that fell into obscurity after the autumn of the Soviet Union – would resume by the tip of the month, in a plant taken over from Renault.
He additionally famous, nevertheless, that the market had been supported by loans and subsidies for producers, and mentioned 55,000 autos had been bought with authorities help this 12 months.
Manturov additionally proposed extending preferential automotive financing to army personnel, including: “At the moment we are able to communicate of an rising development in direction of a restoration of the trade.”
Sokolov was markedly much less optimistic.
He mentioned the variety of automobiles bought in Russia would this 12 months fall under 1 million, a primary in fashionable historical past.
“Final 12 months it was just a little over 1.6 (million); God keen, this 12 months it will likely be 670,000-700,000,” he mentioned on the annual Transport Week convention.
This compares to gross sales of round 3 million models a 12 months as not too long ago as 2012 – earlier than a plunge induced partly by a earlier wave of sanctions in 2014, after Russia unilaterally annexed Crimea from Ukraine.
“Certainly, Avtovaz, in addition to your entire automotive trade of the Russian Federation, has most likely discovered itself in essentially the most troublesome state of affairs this 12 months,” Sokolov mentioned.
“We now have by no means earlier than confronted such a large-scale and complete problem.”
