New cars sales in Russia hit 15-year low in April as sanctions bite: Autostat

The sales of new cars in Russia dropped to the lowest monthly level in 15 years to just 28,000 units in April, auto analytics agency Autostat said May 10, as the industry suffers the fallout of the sanctions on Moscow over its invasion of Ukraine.

New car purchases were down 64.5% on the month, and 83.9% lower on the year, due to reduced production by several automakers, ceased imports, expensive bank loans and significantly higher car prices, according to Autostat.

The previous low was 54,500 units recorded in April 2020, owing to the COVID-19 pandemic.

Lada, Kia, Hyundai and Renault brands comprised just over half of the cars bought in April.

In January-April, Russians bought roughly 291,900 new cars, down 44.5% on the year.

Russian domestic hot-rolled coil price was assessed at Rb 60,500/mt May 4, down 3.20% on the week, S&P Global Commodity Insights data showed.

Since the start of the invasion Feb. 24, many automakers suspended supplies to Russia, and disruptions to the supply of components caused stoppages at a few car plants. Car prices have also increased by 35%-45%, reflecting a fall in the ruble over late February-early March, said Autostat.

In March, the EU placed an embargo on the supply of luxury goods to Russia, which includes cars worth Eur50,000 and more. Similar bans were imposed on the import of cars from the US and Japan.

Since the invasion, nearly 1,000 overseas companies have curtailed operations in Russia, according to the Yale School of Management.

The reduced availability of foreign goods prompted the Russian government to legalize parallel imports end-March, including luxury car imports.

Parallel imports refer to original goods that are imported without documented permissions of the intellectual property owners.

According to Autostat, establishing these imports may take up to six months, as goods are to be shipped not through accredited distributors, but through alternative channels.

Before the May public holidays in Russia, the production of passenger cars was carried out at four plants only — UAZ, Haval Motor Rus, Mazda Sollers and Avtotor, which continue to produce Kia and Hyundai models, while the BMW assembly line was suspended. The majority of car plants in Russia remained idled, according to Autostat.

The Russian government expects foreign automakers, which have not formally withdrawn from Russia, to make a final decision with regards to their operations in the country by June.

— Ekaterina Bouckley