MOSCOW -- Sales of new cars in Russia are expected to rise 3.6 percent this year to 1.87 million, marking a slowdown from last year's surge of 13 percent to 1.80 million, according to the Association of European Businesses (AEB) lobby group.
New-car sales in December rose 5.6 percent to 175,240, the AEB said in data published on Monday.
The market is unlikely to keep up last year's double-digit growth because of uncertainties stemming from this year's VAT hike to 20 percent and the threat of the U.S. imposing new sanctions on Russia, thegroup said.
“The outlook for 2019 is not so straightforward. Consumer tax increases and a possible tightening of US sanctions create significant risks and uncertainties for the market performance especially in the first quarter of the year,” said Joerg Schreiber, chairman of the AEB automobile manufacturers committee.
Automakers warned last year that the plan to raise VAT would hit car sales, which had started to recover from four years of stagnation.
AEB said that strong prior year sales would hamper a strong start in 2019, while it was also unclear what kind of support measures, if any, the government might pursue. The group said it saw "better chances for growth again in the second half, as fundamental market demand should be robust enough to offset uncertainty.