Interest rate cuts could revive Russian auto market, but major improvement not expected in 2025 - Manturov

SAMARA. Sept 8 (Interfax) - The easing of the Russian Central Bank's monetary policy could revive the country's automobile market, which already started showing encouraging signs in late summer, but the figures are unlikely to change dramatically before the end of this year and forecasts for a drop of around 20% will be close to the reality, First Deputy Prime Minister Denis Manturov said.

"We're looking foremost to the Central Bank making a decision on the key rate, which significantly influences consumer demand, meaning the desire to either acquire an automobile or keep money in a deposit. I really hope that the signals we received in August, meaning from the market, and the great hope that the downward trend in the rate will continue to the end of the year will significantly influence buyers' decision making regarding the acquisition of automobiles," Manturov told reporters in Samara.

The Central Bank began cutting its key rate from 21% in June and it is now at 18%, and another rate cut of 1-2 percentage points is expected at the bank's September board meeting.

The Association of European Businesses forecast after first-half results were in that sales of cars and light commercial vehicles in Russia will fall 24% in 2025.

"Probably, the figures that the AEB and other consultants are giving [for the anticipated drop in sales] - 24%, 20% - are probably close to the truth, because we're unlikely to be able to dramatically ramp up shipments before the end of the year. But some kind of correction in the direction of an improvement is still possible before the end of the year," Manturov said.