MOSCOW (Bloomberg) -- Russian new car sales may grow more than forecast this year as the government’s rebate program stimulates demand.
The Association of European Businesses, whose members include automakers Volkswagen AG and Ford Motor Co., raised its target to 1.8 million vehicles from a previous estimate of about 1.67 million, the lobby group said on Tuesday. New sales of passenger cars and light vehicles jumped 62 percent in October from the same month last year to 188,478, AEB said.
That pushed sales in the first 10 months to 1.5 million vehicles, or 22 percent more than the same period last year. State-run AvtoVAZ, partly owned by Renault SA, led the advance, with sales jumping 78 percent to 50,251 last month, giving it more than a quarter of the domestic market.
“This continued recovery is very encouraging across all segments of the industry,” David Thomas, chairman of AEB’s automobile manufacturers committee, said in the statement.
Russia’s government in March started offering vouchers worth 50,000 rubles ($1,631) to people who swap cars older than 10 years for new vehicles made in Russia to help manufacturers stung by the steepest economic decline on record.
The country is emerging from last year’s 7.9 percent contraction as higher commodities prices and domestic consumption fuel growth. The government expects the economy to expand 4 percent this year.
Carlos Ghosn, who heads Renault and its affiliate Nissan Motor Co., said this month that he expects Russian car sales to more than double to 4 million annually within five years.