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Russia May Ease Ruble Risk for Foreign Automakers

7 Mai 2015 - Automotive News

Russia May Ease Ruble Risk for Foreign Automakers

Russia's government is planning to introduce measures to reduce the risk of ruble volatility for foreign automakers that have localized production in the country, Kommersant newspaper reported today, citing industry sources.

Automakers asked the government to consider such measures late last year when the ruble fell sharply, but officials only started looking at the steps after General Motors scaled back its presence in the market in March. GM said it would shut its Russian factory and wind down its Opel brand in the country.

The changes, which are being considered by the Economy Ministry, may be approved toward the end of the second quarter or early in the third quarter, Kommersant said.

The ministry was not immediately available for comment.

Non-Russian automakers have been forced to raise new car prices by about 20 percent this year to try to offset the weakening of the ruble. Despite the price hikes, foreign automakers can lose as much as $2,000 on each vehicle sold, Vladimir Mozhenkov, chief of the Russian Association of Automobile Dealerships, told Bloomberg in March.

After several years of growth in excess of 10 percent, car sales in Russia have plunged on a weaker ruble, dampened by Western sanctions over Ukraine and a slide in oil prices.

New-car sales in Russia fell by 42.5 percent in March, year-on-year.

Foreign automakers working in Russia include Ford, Volkswagen, Renault and Nissan.

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