[Excerpt]
The Russian light-vehicle market posted a significant 6.7%
year-on-year (y/y) decline in sales during May to a figure of
137,624 units, according to the latest data from the Association of
European Businesses (AEB). This result dragged the year-to-date
(YTD) figure well into negative territory, with a 2.2% y/y decline
for the first five months of the year down to 677,570 units. May's
figures could prove to be something of a harbinger for the market
as there was no particular external factor for the poor performance
such as a calendar effect comparison, other than unseasonably warm
weather, according to the head of AEB's vehicle manufacturers'
committee Joerg Schreiber. He said, "No good news from the
automotive market in May, instead a nearly 7% drop in sales volume
- the most noticeable year-on-year loss in over 2 years. Of course,
it could be said that the extraordinary warm weather this year is
not helping retail sales as many people spend more time than usual
away from the big cities and their shopping malls. The main reason
of the current trend however remains a weaker retail demand, driven
by macroeconomic factors such as rising household costs in the wake
of the VAT increase earlier this year. Specifically automotive, we
have a market that is still digesting a substantial reduction in
government subsidies stimulating retail purchases in the past. We
will have to see how these factors play out over time, but for now
we are looking at a rather challenging environment."
