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Sanctions: Russian car sales drop

Sanctions: Russian car sales drop

New car sales continued their decline in Russia in May, dropping 83.5% year-on-year, weighed down by inflation and heavy Western sanctions against Moscow over its offensive in Ukraine.

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In May, 24,268 new light vehicles were sold, according to figures published by the Association for European Business (AEB), which groups manufacturers in the sector.

Compared to April, this is a 52% decrease.

The collapse in sales began in March, after Western countries imposed severe sanctions on the sector, in particular banning the export of spare parts to Russia.

Other than sales, car production is one of the most suffering sectors of Russia’s industrial sector.

The withdrawal of many foreign brands from the country and the suspension of the delivery of spare parts led to the suspension of many domestic factories. In April, auto production fell 85.4% in one year.

Since the entry of Russian forces into Ukraine on February 24, several producers have also announced to stop selling components or cars to Russia or stop production in Russia.

Another thunderbolt: Renault, whose work in Russia with Avtovaz straightened this giant, sold its assets to the Russian state, the first major nationalization.

Tens of thousands of workers at Avtovaz, Russia’s largest car manufacturer, have been on paid leave for months, and most of its production has been shut down.

Inflation and the instability of the ruble also reduced the prospects of Russians buying imported products, especially cars.

Major global automakers invested heavily in Russia during the growth period of the 2000s.

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In May, Russia published a list of about 100 categories of goods that are allowed to be imported without the consent of intellectual property owners in order to circumvent the restrictions.

Among these products, we find in particular the main car brands and spare parts.

Russia has also relaxed vehicle manufacturing standards on its territory, allowing cars to be produced without ABS or airbags, due to a lack of electronic components and spare parts.