The Association of European Businesses (AEB), an industry group advocating the interests of carmakers in Russia, said on Tuesday it expects new car sales in the country to fall 2.1% in 2020 year-on-year to 1.72 million vehicles, Reuters reported.
The segment recorded a 2.3% drop in 2019. The forecast puts Russia’s car market on course for its second annual contraction in two years, despite new sales in December rising 2.3% year on year and recovering from a 6.4% drop the previous month, according to AEB.
“The year 2019 proved harder than expected,” said Joerg Schreiber, chairman of the AEB Automobile manufacturers committee, which comprises the majority of car manufacturers operating in Russia.
The “size of Russia’s auto market remains small and lower than its potential,” he told reporters.
Russia’s car market was given a much-needed boost in 2018 when it expanded by 12.8%. But falling real incomes have fueled a subsequent contraction.
The country’s biggest automaker, Avtovaz, also said this week that it expects the car market to contract again in 2020. The fall will be caused primarily due to depressed consumer incomes, a company executive said on Monday.