As the auto industry was hit hard by Western sanctions over the conflict in Ukraine, spending on new cars in Russia more than halved last year. Production fell, prices shot up, and consumers began to turn to used cars that were less expensive.
Russian economic restraints have undoubtedly had a significant negative impact on the country’s auto industry, which was heavily dependent on foreign suppliers and imported components, even though analysts continue to debate their overall effectiveness.
While sales of new cars fell by 58.8%, spending on new cars fell 52% to 1.5 trillion roubles ($20.4 billion) in 2017. In addition, as a result of Western automakers stopping production and selling factories, car production fell to its lowest level since the dissolution of the Soviet Union in 1991.
Despite a 14% increase in spending on used cars, the total amount spent on new and used passenger cars fell over 15% in 2022 due to inflation raising prices and lowering living standards.
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