Russian vehicle sales plunged by 63 percent in March as sanctions imposed over the invasion of Ukraine battered the ruble and many global auto companies joined a boycott of the country, leaving buyers confronting sparse showrooms.
A total of 55,129 new cars were sold in March, the Association of European Businesses said on Wednesday. Russia's first-quarter sales were down 28 percent to 277,332 units, according to AEB.
Sales of Lada cars, Russia's top-selling brand, fell 64 percent in March. No.2 Kia and No. 3 Hyundai both saw volume fall by 68 percent. Renault at No. 4 was down 65 percent and No. 5 Toyota declined by 69 percent.
Click below for a PDF of Russia's sales
The collapse in car sales comes with consumers shifting their spending to essentials as they brace for a recession brought on by the war.
Vehicle prices rose 40 percent in March by some estimates, while automakers from Toyota to Volkswagen halted production in Russia as part of an unprecedented international boycott.
New vehicle sales fell 60 percent in March at Rolf, Russia's largest dealership, according to CEO Svetlana Vinogradova. She forecasts that demand will fall by half this year to a level on par with Spain, which has one-third the population of Russia.
With buyers facing higher prices and fewer options, the government is seeking to stimulate domestic production.
Imported cars from Europe and Japan may be replaced with Chinese and Indian models, according to Anton Shaparin, a vice president of the National Automobile Union.
"Many people are saying that our Chinese comrades won't leave our market," Shaparin said, noting that prices for Great Wall Motor's Haval cars assembled in Russia have risen 50 percent since the invasion. "Of course they won't, they'll milk it until the last ruble."
That contrasts with producers from Ford Motor to Honda that are no longer shipping vehicles or spare parts to Russia.
Renault Group suspended operations in what is its second-largest market and warned it may write down the value of its business.
Local automakers' heavy reliance on imported components has also led to sticker shock. The largest domestic producer, Renault-owned AvtoVAZ, raised prices three times so far this year.
Russia's Federal Statistics Service said last week foreign car prices rose 29 percent from the start of the year.
With new cars hard to find in Russia and accelerating inflation threatening to devalue their savings, some Russians have turned to neighboring markets that have remained open to them.
Russian customers accounted for about 10 percent of sales at Autodom in the Kazakh city of Kostanay, 180 km (110 miles) from the border, according Yevgeniy Biber, the dealership's sales chief.
Previously, they made up about 1 percent of buyers, he said.
Even before the crisis, Russia was already battling a deficit of new cars due to supply chain disruptions and distribution delays that the automotive industry has contended with globally.
Russian new car sales last year were down nearly 50 percent from their peak in 2012 as the economy stagnated since the 2014 annexation of Crimea from Ukraine.
Amid a dearth of parts needed to keep factories open, Interfax reported that AvtoVAZ plans to introduce a stripped down version of its Lada brand made with a minimum of foreign parts such as airbags and anti-lock brake systems.
Vehicle sales in March were among the worst in the last 15 years, according to Azat Timerkhanov of Russia's Autostat consultancy.
"If Europe doesn't restore deliveries, China will be the main beneficiary, at least in terms of market share," Timerkhanov said. "But volumes are going to continue to fall."
Bloomberg contributed to this report
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