Russia new car sales sink 62.4% in August due to Western sanctions

New car sales in Russia were down 62.4 percent in August year-on-year, industry data showed  on Tuesday, as Moscow is facing a barrage of Western sanctions over its military campaign in Ukraine.

In August, 41,698 cars and light commercial vehicles were sold, according to figures released by the Association of European Businesses (AEB).

This was down 62.4 percent from the same month in 2021, AEB said.

The collapse in car sales began in March, as Western capitals pummelled Moscow with unprecedented sanctions after Russia sent troops into pro-Western Ukraine.

Western carmakers have ventured into Russia to assemble cars over the past two decades as the country’s economy expanded, but now many local car factories have been forced to shut down.

Makes that have halted Russian production include BMW, Ford, Hyundai, Mercedes, Volkswagen and Volvo.

Numerous car makers have also stopped sales of their cars or parts to Russia -- including Audi, Honda, Jaguar and Porsche.

Faced with a shortage of imported parts, authorities have eased safety and emission standards for locally produced cars in May -- including dropping the requirement for airbags.

Russia has also allowed for hundreds of categories of goods, including major car brands and spare parts, to be imported without the agreement of the intellectual property owner in an effort to bypass sanctions.

Russia will gradually limit access for non-qualified retail investors to foreign shares issued by companies from designated “unfriendly” countries, the central bank said on Tuesday, citing the need to minimise investors’ risks.

Brokerages will stop executing orders from non-qualified investors to buy such securities from Oct. 1 if their share in investor’s portfolio exceeds 15%, the central bank said. This ceiling will be lowered to 10% from Nov. 1 and to 5% from Dec. 1.

“From Jan. 1 2023, brokerages will have to suspend the execution of any order from a non-qualified investor to increase a position in securities of foreign issuers from unfriendly countries,” the central bank said. Russia will gradually limit private investors’ access to foreign shares issued by companies from designated “unfriendly” countries, the central bank said on Tuesday, citing the need to minimise investors’ risks.

The move comes months after sweeping western sanctions, imposed to punish Moscow for its actions in Ukraine, led to the freezing of some of the foreign securities held by investors in Russia.

Brokerages will, from Oct. 1, stop executing orders from non-qualified investors to buy securities in countries that sanctioned Russia if their stake in an investor’s portfolio exceeds 15%, the central bank said.

This ceiling for non-qualified investors will be lowered to 10% from Nov. 1 and to 5% from Dec. 1.

“From Jan. 1, 2023, brokerages will have to suspend the execution of any order from a non-qualified investor to increase a position in securities of foreign issuers from unfriendly countries,” the central bank said in a statement.

Agencies