MOSCOW (Reuters) -- Russian new-car sales are expected to fall by between 8 and 12 percent this year, PricewaterhouseCoopers said.
This is a sharp downgrade of its forecast, made last January, of a 3 percent decline. The latest prediction reflects Russia's sharp economic slowdown and devaluation of the ruble.
PwC expects sales of new cars in Russia to be about 2.3 million to 2.4 million vehicles, Sergei Litvinenko, a senior manager in the firm's automotive practice in Russia, told reporters.
Last year sales fell by 5.5 percent to 2.6 million and auto industry revenue fell 3 percent to $69 billion. In the first half, sales fell 7 percent to 1.2 million units and in value terms the market declined 3 percent to $31.5 billion.
The lower sales were due to a number of factors, including uncertainty linked to the Ukraine crisis and the weaker ruble, PwC said. The weak ruble pushes car prices up because even vehicles manufactured in Russia typically have many imported parts. Increased interest rates on auto loans has also depressed demand.
Litvinenko said the market was expected to recover to its 2012 level in the next two or three years and to grow by about 3 to 3.5 percent a year thereafter.
The Moscow-based Association of European Businesses (AEB) has also cut its outlook for the market. Last month it predicted a 12 percent drop in unit sales this year compared to its previous forecast of a 1.6 percent decline.