Russia sales fall 18% in October on chip shortage

Automotive Industry

Source: Automotive News Europe, 2021-11-09

New-car sales in Russia fell by 18% in October as the global shortage of semiconductors continued to squeeze the volume of vehicles available on the market.

Sales were 126,204, the Moscow-based Association of European Businesses (AEB) said in a statement on 8 November. The drop was the fourth consecutive month of declines.

The AEB said it does not see an early end to the chip crunch that has forced automakers to halt or reduce production.

"There is still a long way to overcome the global production shortage and new problems with logistics due to breaks of the supply chains," Thomas Staertzel, Chairman of the AEB Automobile Manufacturers Committee, said in the statement. 

On a positive note, Staertzel said that electric vehicle sales were up to 845 for the year so far, a modest figure, but 118% higher than total EV sales in 2020.

Russia plans to subsidise the purchase of domestically manufactured EVs to stimulate demand and production, the Economy Ministry said in August. Russia wants annual EV production of 220,000 by 2030.

Staertzel warned that the failure to prolong favorable import customs duties for EVs would lead to price increases, declining demand and stagnating sales.

The Eurasian Economic Commission (EEC), a regional customs union including Russia, dropped the import customs duty rate for vehicles with electric motors in May 2020, but that expires at the end of 2021 and Russian media have reported that Moscow will oppose an extension. 

"Our Committee is convinced that the prolongation of the zero-import customs duty for battery electric vehicles is mutually beneficial for all market participants and the government," Staertzel said.

Sales of Lada, Russia's top-selling brand, fell 31% in October, while No. 2 Kia was down 24%. Third-place Hyundai fell 15% and No. 4 Renault's volume dropped by 36%.

Toyota was the only winner in the top 5 with a 6% increase. Volkswagen, which slipped to tenth place, fell 52%. Other monthly winners included Peugeot, with sales up 107%; Opel, which rose 102%; Citroën which gained 44%; and Volvo with a 7% increase.

The AEB data does not include sales of BMW and Mercedes-Benz cars after the companies decided to report figures on a quarterly basis.

Through October 2021, Russian sales rose 11% to 1.31m, compared with the same period in 2020 when the country was in the grip of COVID-19 lockdowns

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