A slowdown in economic growth in Russia is taking its toll on the auto market. After sales of new cars dipped unexpectedly in March, AvtoVaz, the country’s leading automaker, is considering trimming its 2013 production forecast.
Russian auto dealers are hoping that abnormally bad weather accounted for a 4 per cent decline in new car sales in March and that the market will pick up in the coming months.
AvtoVaz, part owned by Renault of France, accounts for almost one in three of every passenger car made in Russia and is seen as a bellwether of the industry. Igor Komarov, vice president of AvtoVaz, is pessimistic about the outlook for sales this year. “I think we will see negative results in the sector (in 2013) compared to 2012,” he told reporters on the sidelines of an economic conference in Moscow on Thursday, Kommersant, the Russian business daily said.
Komarov said AvtoVaz would wait to see April sales results before amending its forecasts for the full year, but a revision of the company’s plans to produce 800,000 vehicles this year is on the cards.
AvtoVaz has been undergoing a major restructuring since being rescued from bankruptcy by a huge government bail out during the global financial crisis. Renault, its partner Japanese Nissan and Russian Technologies have teamed up in a joint venture that will acquire a 74.5 per cent stake in the automaker by mid-2014.
With economic growth shrinking and the boom in consumer spending slowing down it’s not clear what shape the Russian auto market will be in at that date.
The Association for European Businesses, a lobby group that tracks the Russian auto market, is for now standing by its forecast for flat new car sales in 2013.
“The forecast still stands, but we will have to watch further developments closely,” the AEB said in a statement earlier this month. “We hope that with the final onset of spring weather, customer activity will increase and contribute to a robust sales result in the second quarter.”
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