Car Sales in Russia Decline Slightly in June: AEB

New cars sales in Russia fell 3.3% year on year in June to 151,180 units, the Association of European Businesses (AEB) said on Thursday.

“It is clear that market growth in the full year of 2019 is not a realistic scenario anymore,” Joerg Schreiber, Chairman of the AEB Automobile Manufacturers Committee was quoted as saying on the business group’s website.

Overall in January-June, the market declined by 2.4% to 0.83 million vehicles.

This made the third month in a row that Russian car sales contracted, after extensive state support contributed to the recovery of the passenger car and LCV market in 2017-2018.

“Six months into 2019, we find the market 2.4% down year-on-year, with a second quarter that proved more challenging than the first. Market expectations for the second half of the year are not fundamentally better,” the head of AEB Joerg Schreiber commented. “It is clear that market growth in the full year of 2019 is not a realistic scenario anymore,” Schreiber warned. The AEB de-facto revised the car market outlook to best-case-scenario zero growth, as “even with a certain trend improvement in the second half, it would appear that the best outcome the market can hope for is to equalize last year’s sales result.”

Previously market participants already warned that declining consumer confidence and incomes will drive Russian passenger and LCV sales to decline by 3-10% in 2019.

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.

Industry Minister Denis Manturov recently told state news agency RIA that the government is mulling allocating a further 10 billion rubles ($154 million) to support car sales in 2019.