07-11-2020

Sales of new cars in Russia increased by the most this year in October, bouncing back from a decline in demand triggered by the coronavirus pandemic, the Association of European Businesses (AEB) said on Friday.

A total of 154,164 vehicles were sold in October, 7% more than in October 2019 and up from a 3.4% increase in the previous month, the AEB, which tracks sales of new passenger cars and light commercial vehicles in Russia, said.

However, sales were still down 12.1% to 1.189 million vehicles in the first 10 months of 2020 after plummeting between April and August because of economic restrictions tied to the pandemic.

"This strong result (in October) is mainly triggered by the success of the big market players with domestic production that assures more flexibility in deliveries," Thomas Staertzel, chairman of the AEB Automobile Manufacturers Committee, said in a statement.

Vladimir Bespalov, an analyst at VTB Capital, attributed the pick up in sales to deferred demand following lockdowns earlier in the year, and anticipation of a hike in car prices due to rouble depreciation.

The rouble has lost more than 20% of its value against the U.S. dollar this year, hit by lower oil prices, the pandemic and geopolitical risks.

"Some people had money left because they didn't go on vacation, while others have been afraid to take public transportation and have opted for cars," Bespalov said.