MOSCOW -- Spending on new cars in Russia more than halved last year as the auto industry felt the full force of Western sanctions over the conflict in Ukraine, with production plunging, prices soaring and buyers switching to cheaper used models.
While analysts continue to debate the overall effectiveness of economic sanctions on Russia, there can be no doubt they have hit hard in its car industry, which was heavily reliant on foreign manufacturers and imported parts.
Spending on new cars slumped 52 percent to 1.5 trillion rubles ($20.4 billion) last year, while the number of new cars sold tumbled by 59 percent.
Car production also slumped to its lowest since the 1991 collapse of the Soviet Union as Western automakers halted production and sold factories.
Overall spending on new and used passenger cars dropped over 15 percent in 2022, as inflation pushed up prices and drove living standards down, data from analytical agency Autostat shows, despite a 14 pecent rise in spending on used cars.
That left used cars accounting for almost three quarters of all cars sold, up from 55 percent in 2021, the data shows.
"Money flowed into the used cars market as prices for second-hand cars held up, while at the same time the structure of the new cars market changed significantly," Autostat CEO Sergei Udalov told Reuters.
"Budget Ladas and Chinese cars with prices of 2 million rubles and more remain in it, while premium brands have almost completely left," he said.