MOSCOW -- New-car sales in Russia this year are set to fall 2.1 percent to 1.72 million vehicles after a 2.3 percent drop last year to 1.76 million, the Association of European Businesses (AEB) said on Tuesday.
The forecast puts Russia's car market on course for its second annual contraction in two years, despite sales in December rising 2.3 percent to 179,235 and recovering from a 6.4 percent drop the previous month, according to the AEB.
"The year 2019 proved harder than expected," said Joerg Schreiber, chairman of the AEB automobile manufacturers committee, which comprises the majority of automakers operating in Russia.
The size of Russia's auto market "remains small and lower than its potential," he told reporters.
Russia's car market was given a much-needed boost in 2018 when it expanded by 13 percent. But falling real incomes have fueled a subsequent contraction.
Russia's biggest automaker, AvtoVAZ, which owns the Lada brand, also expects the car market to contract again in 2020, primarily due to depressed consumer incomes, a company executive said on Monday.
Winners and losers
Among the sales winners last year were BMW with sales up 17 percent and Mercedes-Benz whose volume gained 11 percent. Skoda, with sales up 9 percent, and Renault, which gained 6 percent, also had a good year.
- Click here for Russia sales by brand and group for December and 12 months.
Lada, Russia's top-selling brand, rose 1 percent. Kia, at No. 2, fell 1 percent. Hyundai, at No. 3, was flat. Toyota was down 5 percent, while VW brand sales were down 2 percent.
Nissan sales plunged 20 percent, Peugeot was down 15 percent and Mitsubishi fell 12 percent.
Automotive News Europe contributed to this report