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UPDATE 1-Russia’s October auto sales down 18.1% y/y, electric car sales jump

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MOSCOW, Nov 8 (Reuters) – Sales of new cars in Russia fell for the fourth consecutive month in October, down 18.1% year on year to 126,204 units after a 22.6% drop in the previous month, the Association of European Businesses (AEB) said on Monday.

“There is still a long way to go to overcome the global production shortage and new problems with logistics due to supply chain gaps,” Thomas Staertzel, Chairman of the AEB Automobile Manufacturers Committee, said in a statement.

Despite the monthly drop, car sales were up 10.5% in January-October compared to the same period in 2020, when the coronavirus pandemic hampered demand.

A positive note, Staertzel said, was that electric vehicle (EV) sales were up to 845 for the year so far, a modest figure, but 118% higher than total EV sales in 2020.

Russia is planning to subsidise the purchase of domestically manufactured EVs to stimulate demand and production, the economy ministry said in August. Russia wants annual EV production of 220,000 by 2030.

But Staertzel warned the failure to prolong favourable import customs duties for EVs would lead to price increases, declining demand and stagnating sales.

The Eurasian Economic Commission (EEC), a regional customs union including Russia, zeroed the import customs duty rate for vehicles with electric motors in May 2020, but that expires at the end of 2021 and Russian media have reported that Moscow will oppose an extension.

“Our committee is convinced that the prolongation of the zero-import customs duty for battery electric vehicles is mutually beneficial for all market participants and the government,” Staertzel said. (Reporting by Gleb Stolyarov, Anastasia Teterevleva and Alexander Marrow Editing by Mark Potter)

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