Russian car sales soared 46 percent year-on-year in June

Russia’s state scrapping scheme and wider economic recovery gave new-car sales a boost, with a 46% increase year-on-year in June.

Sales rose even further from a 31% climb in May, according to data from the Association of European Businesses (AEB), Arnaud Ribault, head of Citroen cars in Russia and an AEB member. These figures are in sharp contrast with the sudden drops a year ago when the auto industry was close to collapsing. Back then, new-car sales fell due to fears of unemployment and a lack of consumer credit. Last March, Russia launched its car scrapping program, enticing consumers to visit car showrooms once again. The economic recovery is also seen to have played a part. Analyst Vladimir Bespalov at brokerage VTB said that if there had been no state program, the increase would have been lower but that there would still be demand. He said that the demand is higher than producers can currently satisfy. The incentive program in Russia gives car owners 50,000 rubles for trading in their old cars for new, locally produced models. The incentive program was recently extended with a 10.5 billion ruble ($339 million) cash injection.