With 687,370 new light vehicles sold in 2022, the Russian market is plummeting. This is what emerges from the figures published this Thursday, January 12 by the Association of European Businesses (AEB), which brings together manufacturers in the sector. Compared to 2021, almost a million fewer cars were sold. Over one year, the decline is dizzying: -59% from one year to the next.
The most marked falls over the year concern in particular the German models of Volkswagen (-80% compared to 2021), Audi (-79%) and Mercedes-Benz (-78%), the Swedish Volvo (-81%) , the Japanese Lexus (-90%) and Toyota (-80%). On the French side, Peugeot records -72%, Renault -70%, Citroën -67%.
In December alone, sales fell by 50%, according to the AEB. However, this is not the worst month of this year 2022: from March, the month following the Russian offensive in Ukraine, sales posted at least similar declines. With a high recorded in May (-83.5%).
Direct consequences of international sanctions
If car sales fell very quickly after the start of the war in Ukraine, it was because the West immediately implemented sanctions against Russia. This put an end to two decades of massive investments made by the world’s major car manufacturers in Russian territory. Western countries had in particular banned the export of spare parts to Russia, which posed a major problem for the logistics branches of the sector.
In addition to the end of exports of spare parts, particularly European, many producers have simply stopped selling components or cars to Russia, like Audi, Honda, Jaguar or Porsche. Others have announced the cessation of their production, such as Renault, BMW, Ford, Hyundai, Mercedes, Volkswagen or Volvo.
To circumvent these difficulties, the Russian government now authorizes the import of major car brands and spare parts without the agreement of the holders of the intellectual property. The country has also eased the standards for the manufacture of vehicles on its territory, authorizing the production of cars without ABS or airbags, because of shortages of electronic components and spare parts.
Inflation reduces the purchasing power of Russians
At the same time, the explanation also lies on the side of inflation. At 11.9% over the year 2022, it reduces the purchasing power of Russians and the possibilities for them to buy imported products, a fortiori cars. In early December, Vladimir Putin said he expected inflation “at 12.2%” inflation at the end of the year, against a background of contraction of the national GDP “by 2.9%”.
A high level but still far from the apocalyptic forecasts of the spring after the first international sanctions against Moscow in retaliation for its offensive in Ukraine. Prices had flared up in the second quarter of 2022, in the weeks following the start of Russian intervention in its neighbor. In April, inflation had even broken a record since 2002, climbing to 17.8% over one year. Price increases have since stabilized in the country at around 12% since November, according to figures published monthly by the national statistics agency, Rosstat.
Russia: sales of new cars collapsed by -59% following the war in Ukraine