Russia – auto slump hits again hard on local currency weakness

The automotive deliveries in the country last month plummeted faster than initial expectations, posting the biggest loss in three months after the continued weakness of the local currency has forced carmakers to increase prices. According to the Moscow-based Association of European Businesses, sales of new cars and light commercial vehicles dropped 29 percent compared to the same period last year following a smaller 19 percent slide in August – and analysts averagely predicted the registrations would plunge 21 percent. The nine months of the year all posted negative figures and the retraction shows how consumer demand in Russia has all but collapsed because of the country’s second year of recession. Analytical agency Autostat data shows 22 automakers have resorted to raising prices in a bid to adjust to the local currency’s swift depreciation and galloping inflation, including top sellers Renault and Kia. “September did not do much to improve the year-to-date performance of the market, or the outlook on the remaining three months of the year,” commented in a statement Joerg Schreiber, chairman of the AEB automobile manufacturers committee. The industry lobby decided to stick to its previous forecast for auto sales to plunge 37 percent from the figures registered in 2014. Russia, the world’s biggest energy exporter, has seen the first recession since 2009 due to falling oil prices and the sanctions imposed by the US and European Union countries following its implication in the conflict in Ukraine. During the past 12 months, the local currency has lost 36 percent of its value against the dollar, the second-worst performing currency among 24 emerging-market currencies, according to Bloomberg. Via Bloomberg