[Story updated on 7 January 2015]
Audi, General Motors and Jaguar Land Rover temporarily suspended deliveries of vehicles in Russia in December because of the current economic situation. Poor sales have led to a build up of inventory.
The announcement follows last November’s news that Spanish vehicle maker Seat had stopped imports because of falling vehicles sales. Chrysler’s Dodge division also stopped imports in November.
The rouble has been sliding in value against the dollar since the beginning of 2014, and was down 50% against the dollar in the middle of December. The currency regained 9% to 61.5 roubles per dollar on the Moscow Exchange according to Reuters.
Nevertheless, carmakers took the decision to temporarily halt sales in the middle of last month in the face of an uncertain economic climate.
Audi said it was had held back deliveries in an effort to clear inventory but that sales to customers were continuing.
“Due to the increased currency volatility, we are thoroughly analysing the further development of the rouble's exchange rate and are evaluating a possible adaption of vehicle prices at the moment,” a spokesperson for the company told Automotive Logistics.
Audi added that between January and November last year deliveries of its vehicles were more stable – up 7.5% – compared to the overall market, which saw a drop of over the same period of 12%. In recent months, however, the carmaker has seen drops of 20%.
By contrast a spokesperson for GM said that because of volatility in the exchange rate, and with the aim of managing its business risk, it was temporarily suspending wholesaling of vehicles to dealers across the country as of 16th December.
“At the same time we confirm that all Cadillac, Opel And Chevrolet vehicles already purchased by customers will be delivered on the agreed price,” said the spokesperson. “We are monitoring the situation.”
Confirmation on a suspension was also announced by Jaguar Land Rover, which said suspended sales activities throughout its official dealership network in the country for a day.
According to industry analyst IHS Automotive OEMs are increasingly looking at their business risk in Russia as a result of the collapsing value of the currency.
“There is little point in manufacturing and importing vehicles that are going to lose money simply because the rouble’s ongoing slide is so dramatic,” said the IHS’ principal analyst Tim Urquhart in a statement. “And that's even if buyers can be found for these vehicles given the corresponding decline in the passenger car market.”
According to IHS Automotive analysis, the light vehicle market is down by 11.6% in the first 11 months of the year, which it said showed there was little demand in the market despite the introduction of the Russian government’s vehicle scrappage scheme at the start of September.
Urquhart concluded: “With the rouble having lost around half its value against the dollar since the start of the year, and the economic stability that has been the cornerstone of the Putin administration under threat, it is likely that OEMs will look further at revising their Russian business strategies in the coming weeks and months.”
