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Sanctions: Russia’s car market on the way out

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HASn May, 24,268 new light vehicles were sold, according to figures published by the Association of European Businesses (AEB), which brings together manufacturers in the sector. Compared to April, this is a decrease of 52%, but 83.5% compared to May 2021. The collapse in sales began in March, following the imposition by countries heavy sanctions on this sector, in particular banning the export of spare parts to Russia.

Production almost stopped

Beyond sales, it is automobile production that is among the Russian industrial sectors suffering the most. The withdrawal of many foreign brands from the country and the cessation of spare parts deliveries have forced many local factories to stop. In April, car production had fallen by 85.4% over one year. Since the entry of Russian troops into Ukraine on February 24, many producers have also announced the cessation of the sale of components or cars to Russia or the cessation of production in Russia.

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Renault, collateral victim

Another thunderclap: Renault, whose work in Russia with Avtovaz had straightened out this giant, sold its assets to the Russian state, a first major nationalization. Tens of thousands of workers at Russia’s top car maker, Avtovaz, have been on paid leave for months, and most of its production has been shut down.

Inflation and the instability of the ruble have also reduced the possibilities for Russians to buy imported products, especially cars. The world’s major automakers had invested heavily in Russia during a period of growth in the 2000s. intellectual property is permitted in order to circumvent the restrictions. Among these products, we find in particular the major car brands and spare parts. Russia has also relaxed the standards for the manufacture of vehicles on its territory, authorizing the production of cars without ABS or airbags, because of the shortages of electronic components and spare parts.

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