(Reuters) -The decline in sales of new passenger cars in Russia slowed in July, Russian analytical agency Autostat said on Tuesday, with the first signs of recovery on show as some consumers took advantage of low prices in a heavily oversupplied market.
Russia’s car market collapsed in 2022 as foreign automakers left following Moscow’s invasion of Ukraine. Car sales, a key gauge of economic activity, had been steadily recovering since late 2022, but the market entered a sharp decline this year due to high inflation, soaring interest rates and scrappage fees.
Car sales fell 11.4% year on year in July, Autostat data showed, an improvement on the 27.6% slump in June. From January to July, sales were down 23.9% compared to the year-ago period at 651,029 units.
Major Russian vehicle producers, including leading carmaker Avtovaz and truckmaker Kamaz, have blamed slowing sales on prohibitively high borrowing costs for consumers and producers, as well as short-sighted import policies.
The central bank slashed its key interest rate by 200 basis points to 18% in late July, a move that is already supporting the car sector.
Importers have a large stock of cars and are willing to get rid of them by offering discounts and better loan terms, Autostat Executive Director Sergei Udalov said on Tuesday.
This supply was met in July with demand from people withdrawing money from their accounts as the central bank has cut rates, he added.
(Reporting by Gleb Stolyarov; Editing by Alexander Marrow)
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