Russia's Industry and Trade Ministry expects local market for new vehicles to fall over 20% in February

KAZAN. Feb 27 (Interfax) - Russia's Industry and Trade Ministry notes the mixed dynamics of the Russian new vehicle market and expects it to decline over 20% in February after growth in January, Industry and Trade Minister Anton Alikhanov said.

The Russian car market, including passenger cars, light commercial vehicles, trucks and buses, grew 7% year-on-year to 102,500 vehicles in January. The Industry and Trade Ministry previously presented this estimate based on data on registrations of electronic Manufacturer's Certificate of Origin.

"Market dynamics have been mixed since the beginning of the year. There was growth of 7% in January, though sales could fall over 20% in February. However, the drop is in imported cars, while sales volumes of domestic brands have remained practically at the same level," Alikhanov said on Thursday at a meeting of the coordinating council for industry in Kazan.

Alikhanov noted that the Industry and Trade Ministry sees "risks associated with macroeconomic factors, primarily high auto loan rates."

"If necessary, we will adapt our support measures. We will continue to work on more targeted support for demand, which is necessary, among other matters, for developing the auto components sub-sector," he added.

Avtovaz had previously voiced less than optimistic expectations for the car market in February. Avtovaz President Maxim Sokolov told journalists on Tuesday that the company's goal for Lada sales in February was "to reach the mark of about 27,000 vehicles, plus or minus." Consequently, the company has predicted a decline of about 3% in sales this month accounting for the February base of 27,900 vehicles last year.

The Russian car market is overall in an "alarming situation", Sokolov said.

"We have now seen clearly what we talked about at the end of last year. At the time, we talked about a possible market decline to 1.3 million cars in 2025. Today, we clearly see that the market as a whole is doing worse than last year's trajectory. Whether it will exceed the 100,000 car mark in February is a big question. Consequently, we really need to think seriously about what measures we need to take together to avoid a dramatic decline," he said.

The meeting of the coordinating council for industry in Kazan, which Alikhanov is hosting, is devoted to issues of creating a Russian automotive component base.