MOSCOW, , (Pakistan Point News - APP - 12th Jan, 2017 ) - Car sales in Russia fell 11 percent in 2016, an industry group said Thursday, while predicting that the crisis-hit sector would bounce back modestly this year. In 2016 sales of new cars and light commercial vehicles fell by 11 percent, the Association of European Businesses said in a statement. "This year was difficult once again but we saw a light at the end of the tunnel at the end of the year," the association's chairman Joerg Schreiber said at a briefing.
This year the market "has the potential to end a four-year period of decline and to return to moderate growth," Schreiber said in a statement, predicting annual sales would be up four percent on 2016 figures. With more than 140 million residents, Russia had long been an extremely attractive market for global carmakers such as Renault, the majority shareholder of Russia's biggest carmaker Avtovaz, which produces the top-selling Ladas. But the sector, which is highly sensitive to exchange rates, was hit hard by the economic crisis two years ago caused by falling oil prices and Western sanctions on Russia over its actions in Ukraine.
In 2015, car sales slumped nearly 36 percent as most Russians found their purchasing power eroded and were unable to afford expensive cars. This year economists are making more confident forecasts, with the first deputy chairwoman of Russia's central bank Ksenia Yudayeva saying Thursday that "this year if there are not new external shocks, growth can only strengthen," quoted by TASS news agency. The Russian government has said it will continue supporting the car industry this year with a programme worth 62 billion rubles (just over $1 billion, one billion Euros) that includes providing discounts to farmers, small business owners and families with many children.
"We don't need Detroit, we need our own modern car factories that manufacture a good product," Prime Minister Dmitry Medvedev said in December, referring to the US city famed for auto manufacturing. In a sign of growing confidence, Ford on Thursday returned its factory in the northwestern city of Saint Petersburg to working a full five-day week after working only part-time since 2014, Vedomosti business daily reported.