Falling demand amid the COVID-19 crisis has taken a hit on car sales in Russia, which may drop up to 50% due to the pandemic, and the risks of massive layoffs at assembly and auxiliary enterprises is growing, Nezavisimaya Gazeta writes.
According to data provided by Boston Consulting Group, the sales of new cars and light commercial vehicles in Russia could drop by 20% by the end of the year in a best-case scenario and by 50% in the event of the worst-case scenario.
It is not improbable that this trend will result in a massive reduction of the workforce in the automotive industry. During the 2008-2009 crisis, the number of employees at Russian automobile factories and enterprises manufacturing components for assembly declined by almost one-third to 238 mln people, according to ASM Holding.
The shutdown of automotive industry enterprises in Europe has resulted in layoffs of more than 1 mln employees and production losses equivalent to 1.2 million cars, the paper quotes Konstantin Avakyan, Deputy Department Director at AutoSpecCenter, as saying.
“Russian manufacturers are likewise thinking about optimization by reducing staff or working hours,” he said.
At the same time, government support for the automotive industry in the form of cancelling the utilization fee and re-introducing customs duties for the largest automobile concerns with localized production in Russia is aimed primarily at maintaining staff during the period of restrictions on the activities of enterprises, the expert stressed.
