MOSCOW (Bloomberg) -- Russian new-car sales fell for an eighth successive month in August, underscoring the country's deepening slide into economic recession, even as a weakening currency encouraged some consumers to spend.
Sales contracted 19 percent to 138,670 after a 28 percent decline in July, the Association of European Businesses in Russia (AEB) said in a statement on Tuesday.
Eight-month sales in Russia fell 34 percent to 1.05 million, the AEB said
The decline highlights Russia's economic woes, which may deepen as wages fall. After insisting that the worst of the recession was over, the government cut its forecasts for 2015 and 2016 in August following a renewed slump in global oil prices and a fresh plunge in the ruble. The 46 percent depreciation against the dollar makes it the world's worst-performing currency over the past 12 months.
After years of growth in excess of 10 percent, Russian car sales collapsed in 2014 as the economy shrank and the ruble weakened, due to lower oil prices and Western sanctions over Moscow's role in the Ukraine crisis.
- Download PDF of Russia's August and eight-month sales, above right.
"The latest sharp drop in the value of the ruble is a sure guarantee for the market to see an immediate uplift in sales, only to be followed by a corresponding slump later," Joerg Schreiber, chairman of the AEB automobile manufacturers committee, said in the statement. "So get ready for another ride on the Russian roller coaster."
The ruble staged a 41 percent rally against the dollar from January 30 to May 18, which has since been erased, according to Bloomberg data.
The currency's reversal has put the squeeze on consumption, which accounts for about half of Russia's economic output, and spurred inflation. Central bank moves to devalue the currency at the end of 2014 triggered a surge in car sales. Since then, wages have shrunk for ninth consecutive months when adjusted for price growth.
"If you had asked me even two to three months ago, I would say that we touched the bottom and the market will start recovering soon," Marcus Osegowitsch, the general director for Volkswagen Group RUS, said in an interview Friday. "But now the situation looks less optimistic because of the unfavorable situation on the global market."
Volkswagen doesn't expect demand in Russia to recover in 2016, he said.
In June, the AEB forecast a 36 percent drop 2015 car sales, a steeper drop compared with an earlier forecast of a 24 percent decline.
Reuters contributed to this report