MOSCOW (Bloomberg) -- Russian new-car sales plunged 29 percent last month, extending a collapse from 2015 that is forcing the government to spend billions of rubles more to support the ailing auto industry.
Sales in January dropped to 81,849, the Association of European Businesses (AEB), said in a statement on Monday.
The decrease follows a 46 percent drop in December.
Continued weakness in oil prices is adding to the plight of automakers already wrestling with low consumer demand and ruble devaluation.
With the economy of the world's biggest energy exporter on track for its second year of recession, the government is readying about 50 billion rubles ($650 million) in state support for the car industry this year on top of the 43 billion rubles it received in 2015, according to Prime Minister Dmitry Medvedev.
"The continuing price inflation fueled by a very weak currency will remain a major challenge on the long way to a market recovery," Joerg Schreiber, chairman of the AEB automobile manufacturers committee, said in the statement. "The recently announced extension of the government support to the automotive sector in the first half of 2016 is a positive step."
The government has stepped in to coax crisis-scarred Russians into buying cars, offering subsidies on auto loans and discounts for drivers willing to part with their old vehicles.
The state-support measures have slowed the decline in the car market by half, according to Industry Minister Denis Manturov.
Demand for cars will probably decline another 4.7 percent this year after a 36 percent drop in 2015, Schreiber said last month.
The ruble is down 4.5 percent against the dollar this year, the fourth-worst performer among 24 emerging-market currencies tracked by Bloomberg.
• Download PDF, above right, for Russia sales for January by brand and automaker.
