LONDON: The icy finger of recession is brushing the spines of Western automakers in Russia, as the nation's car market Klondyke turns to Fools' Gold, debased by stock market tumult and the recent decline in the price of oil.
The latter, a godsend for most non-oil-producing economies, is bad news for Russia and has already slowed demand for automotive products.
As has the worsening financial climate in the other BRIC nations – Brazil, India and China – upon which Western manufacturers have depended as credit drought sears their home markets.
August car sales in Russia – further damaged by the effects on sentiment following the Georgian conflict – grew by just 6% year-on-year, down from 22% in July, reports JD Power.
Analysts, however, are doing their best to talk-up the market, noting that August is traditionally a slow month for retail sales. Most still predict double-digit growth versus 2007.
Says Walt Madeira, manager for sales forecasting at CSM Worldwide in London: "We don't see [Russia] falling drastically like European markets. It's just too big, and they do have quite a lot of money."
Data sourced from Financial Times; additional content by WARC staff