Spending on new cars in Russia more than halved last year due to the impact of Western sanctions and to surging prices, Reuters reported on Friday, citing analytical agency Autostat.
The latest figures show that Russians spent 1.5 trillion rubles ($20.4 billion) or 52% less on new cars last year, while the number of new cars sold dropped by 58.8% as prices soared sharply, disrupting sales.
Automobile production also slumped to its lowest since the early 1990s, the outlet said, as Western car makers halted production and sold factories.
Russia’s automobile industry, which is heavily reliant on foreign investment and equipment, has been hit by an exodus of international manufacturers due to Western sanctions. American, European and Japanese car manufacturers have either left the country or suspended deliveries of cars and components, halting their local production indefinitely.
As spending on new passenger cars dropped, sales of used ones rose 14%, according to Autostat data. Second-hand vehicles accounted for almost 75% of all cars sold in 2022.
“Money flowed into the used-cars market as prices for second-hand cars held up, while at the same time the structure of the new-cars market changed significantly,” Autostat CEO Sergey Udalov told Reuters.
The average price of new cars sold in 2022 surged by 17% to 2.33 million rubles ($31,289), while those of used cars climbed by 32% to 890,000 rubles ($11,953), the agency is reporting.
Market analysts, however, predict a fast recovery for the market, expecting sales of new models to climb to around 800,000 this year, from 687,370 last year.
This article was orginally published by RT.