Russia's crisis produces a paradox: surging luxury car sales

Tue Feb 2, 2016 12:18pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Gleb Stolyarov and Jack Stubbs

MOSCOW (Reuters) - As Russia wrestles with an economic crisis, more and more Porsches and Rolls-Royces are appearing on its roads.

It seems something of a paradox; while mass-market car sales in the country have tumbled along with the rouble and oil prices, one area is bucking the trend - luxury cars.

Sales of Porsche, Bentley, Rolls-Royce and Lexus cars all rose last year, even as Russia sank into recession.

"It's bizarre," said IHS Automotive analyst Tim Urquhart. "Even in the absolute depths of despair which the economy is in at the moment, these brands still seem to be doing ok."

Falling wages in the country have deterred many people from buying new cars in any price bracket, but for those Russians who can still afford top-of-the-range autos, it could be a good time to buy.

The weaker rouble, which lost almost 20 percent against the dollar last year, means foreign-made luxury cars are considerably cheaper in Russia than elsewhere.

A new Porsche 911 Turbo S Cabriolet costs 11.8 million rubles ($151,687) in Russia, for example; in the United States, the same model sells for $200,400.

Maria Malinskaya, showroom head at the Rolf car dealership group, said some premium models were now two or three times cheaper in rubles than in dollars.   Continued...

 
An exterior view shows a Ferrari showroom of a dealership at 'Barvikha luxury village' shopping mall outside Moscow, Russia, February 1, 2016. REUTERS/Maxim Zmeyev