January 13, 2020 / 11:43 AM / 13 days ago

UPDATE 1-Russia's Avtovaz expects continued car market contraction in 2020

(Updates to include 2020 forecast and management quotes)

By Gleb Stolyarov

MOSCOW, Jan 13 (Reuters) - Russia’s biggest automaker Avtovaz expects the country’s car market to continue to contract in 2020, primarily due to depressed consumer incomes, Avtovaz’s Executive Vice President of Sales and Marketing Oliver Morne said on Monday.

Avtovaz estimated Russia’s total sales of passenger and light commercial vehicles at 1.76 million cars in 2019, down 2% on the previous year. Sales of Avtovaz’s Lada car increased by 1% to 362,356 units, the company said.

The Russian car market was given a much-needed boost in 2018 when it expanded by 12.8%, but falling real incomes have been partly responsible for its subsequent contraction.

In 2020, Avtovaz forecast sales in the country’s car market at 1.7 million units, 3.4% lower than its expectations for 2019.

Morne said the volume of sales could be higher than forecast in the coming year, depending on state support measures.

“The market is contracting primarily due to people with low incomes,” Morne told reporters on Monday. “So any support measures have a significant effect - they help people with low incomes.”

Avtovaz is aiming to increase its market share in the coming year, Morne added.

The Association of European Business, which comprises the majority of car manufacturers operating in Russia and compiles statistics about new passenger and light commercial car sales, will release data for 2019 and the forecast for 2020 on Tuesday. (Reporting by Gleb Stolyarov; Writing by Alexander Marrow; Editing by Jan Harvey and David Evans)

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