MOSCOW (Reuters) - Russian car sales in 2024 are expected to be higher than previously forecast, according to the Association of European Businesses (AEB), which said the market had reacted better than expected to challenges around imports and high interest rates.
Russia's car market is gradually recovering after a collapse in 2022, while Chinese carmakers have been plugging the gaps left by Western competitors, most of whom have exited Russia since the conflict in Ukraine began.
The AEB now expects 1.45 million new car sales this year. In January, it had predicted that new passenger car sales would increase by 15% year-on-year to reach 1.3 million units.
The updated forecast comes in light of a robust sales performance in the first half of the year, despite challenges posed by parallel imports and regulatory measures, Alexei Kalitsev, chairman of the AEB's Automobile Manufacturers Committee, said in a statement.
The departure of Western automakers led to a surge in imported parts and cars. Russia has authorised the so-called "parallel import" of many goods that can enter the country without the manufacturer's permission or knowledge.
Regulating some imports through the Eurasian Economic Union has also contributed to a slowdown in market growth, the AEB said, as has the high cost of loans with interest rates at 16%.
The main source of market growth continues to be the import of new cars, said Kalitsev. In the future though the share of imports will decrease due to more local production, he added.
The forecast was raised "taking into account various economic, regulatory (and) political factors and, assuming that sanctions and other pressure will remain at the same level until the end of the year," the AEB said.
(Reporting by Gleb Stolyarov; Editing by Alexander Marrow and Andrew Osborn)
