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. Last Updated: 07/27/2016

Car Sales Fall 58% In May to New Low

The collapse in car sales on the Russian market failed to find a bottom in May, plunging 58 percent to demonstrate that state efforts have failed to spark a recovery, the Association of European Businesses said on Monday.

The Russian car market, which had been expected to become the largest in Europe this year, has instead gone from bad to worse, AEB data showed. Year-on-year sales fell 47 percent in March and 53 percent in April, making May the worst month yet.

"So far, government support measures have not been able to stop the decrease in sales and to change the continuing trend," Martin Jahn, vice chairmen of the AEB Automobile Manufacturers Committee, said in a statement.

Sales of Major Carmakers

 Jan-May 09% changeMay 09% change
Ford Group48,095-456,035-72
VW Group43,881-48,418-30
In the year to date, sales of new cars have dropped 47 percent, the data showed, with Ford, Toyota, Hyundai and GM among the biggest losers.

Total May sales of 119,376 cars were also 12 percent below the number of cars sold in April.

Jahn urged the government to move quickly in expanding its program to lower the price of car loans.

"The volume of funds for the program should be increased extending the program to all locally manufactured cars, lifting the threshold of the program from 350,000 to 600,000 rubles as soon as possible," he said.

In its current form, the scheme offers subsidies to banks for charging lower rates on car loans. It applies to 30 foreign and domestic models costing 350,000 rubles ($11,400) or less. But the industry and trade ministry admitted last month that it has failed to attract buyers in significant numbers and proposed expanding the program to include cars costing up to 600,000 rubles.

Industry and Trade Minister Viktor Khristenko has forecast a decline in sales of more than 60 percent in 2009, implying that the worst is still to come for this market. In total, 574,680 fewer new cars were sold in the first five months of this year than in the same period of 2008 in Russia.