MOSCOW – Russian car sales are seen rising by 6 percent from last year to 2.8 million units in 2012, Deputy Industry and Trade Minister Alexei Rakhmanov said.
The forecast indicates a sharp slowdown from the 23 percent increase seen in the January-February period.
Western carmakers are targeting Russia as one of the most important growth areas for the industry as slowing sales and overcapacity issues dog more mature markets.
"We believe in 2012 we'll see 6 percent growth compared to 2011," Rakhmanov told the annual Russian Automotive Forum on Tuesday.
He said the end of a government sponsored scrappage scheme would contribute to the slower growth, as inexpensive local brands such as Lada cease to benefit.
The scheme, which offered drivers a 50,000 ruble (1,295 euro, $1,700) cash incentive to trade in locally made vehicles aged 10 years or older, ended in 2011 after contributing 600,000 new sales to the overall market.
The Moscow-based Association of European Business (AEB), which compiles independent Russian car sales, has forecast new sales in the range of 2.6 million to 3 million for 2012.
The top of that range would see the market surpass the pre-crisis year of 2008, when Russian was poised to overtake Germany to become Europe's biggest market. Last year, 3.17 million cars were sold in Germany.
Russian sales halved in 2008 as the economic downturn destroyed consumer confidence and dried up access to credit. Lada-owner AvtoVAZ, 25 percent owned by Renault, had to be bailed out by the state to prevent its collapse.
Rakhmanov said he thought Russia could eventually become Europe's No. 1 market, but not in 2012.
"Are we happy that Russia is still the number two market? Yes. Can we be number one? Probably not this year," he said.
Source: Reuters, with contribution from Automotive News Europe