Western Automakers Hit Hard as Russia Car Sales Fell 36% in 2015

Sales fell to 1.6 million last year to the lowest level since the country's previous recession in 2009, according to data released today by the Moscow-based Association of European Businesses (AEB).

Volume at most Western brands fell faster than the market decline with Renault's full-year sales down 38 percent, Volkswagen's by 39 percent and Ford's by 41 percent. General Motors, which has ended Russian sales of mainstream Chevrolet cars and all Opel models, saw Chevrolet sales drop by 60 percent and Opel's volume plunge by 74 percent.

Japanese automakers Toyota and Nissan had 39 percent and 44 percent declines respectively. Asian rivals Hyundai and Kia did better with Kia, Russia's second best-selling brand, limiting its sales decline to a 16 percent drop and sales at Hyundai, the No.3 brand, dropping 10 percent.

Lada, Russia's best-selling brand, saw sales decline by 31 percent.

Lexus and Porsche showed gains of 6 percent and 10 percent respectively as wealthy customers sought to buy hard goods in the wake of the steep decline in the ruble.

French brands Peugeot and Citroen saw sales plummet by 73 percent and 72 percent respectively.

December sales dropped 46 percent from an abnormally high base a year earlier to 147,000 vehicles, according to the AEB.

2016 forecast

Demand will probably decline another 4.7 percent in 2016 to 1.53 million cars and light commercial vehicles, Joerg Schreiber, chairman of the AEB's Automobile Manufacturers Committee, told reporters in Moscow today.

Last year was the worst in a decade for the Russian economy, hurting the middle class, Prime Minister Dmitry Medvedev said Wednesday. Prices for oil, Russia's main export earner, fell to 12-year low, prompting Finance Minister Anton Siluanov at a conference Wednesday to recall the 1998 crisis when a ruble devaluation accompanied by inflation eroded incomes and living standards.

In the past three months, the ruble has been the third-worst performer among 24 emerging-market currencies. The current exchange rate "creates a difficult situation for automakers, prompting them to boost prices," Schreiber said. "Still, 2016 will be less turbulent for the car market. The pace of sales decline is set to slow."