Russia Autos Q1 2020
We forecast total vehicle sales to decrease by 1.1% in 2020 after an estimated 3.0% contraction in 2019. Stagnating realincome, an increase of vehicle utility tax from January 2020, and the reduction of government initiatives' scope will weigh on vehicledemand. However, monetary easing will translate into relatively low interest rates on loans, providing support for vehicle sales onfinance. This is especially true for the models that fall under the state-run programmes despite the reduction of models that fallunder the incentives on the back of the upcoming price increase from a higher utility tax. However, we highlight the significantpolitical and economic risks that Russia's automotive sector will face over the coming years.
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