Dependent on global supplies, Russia's car industry was hit hard by debilitating Western sanctions over Moscow's military offensive in Ukraine.

Sales of the country's most popular and affordable brand, Lada, fell 84 percent to 6,000 units year-on-year.
Sales of the country's most popular and affordable brand, Lada, fell 84 percent to 6,000 units year-on-year. (Reuters Archive)

New car sales in Russia have sunk by 83.5 percent year-on-year in May as the effects of unprecedented Western sanctions hit the country's economy and consumers.

Only 24,268 cars and light commercial vehicles were sold in Russia in May, said the Association of European Businesses (AEB) in Moscow on Monday.

The collapse in sales in May came after a 78.5 percent drop in April.

Last month, only 24,268 vehicles were sold, AEB said. A year earlier, sales were six times greater.

Sales of the country's most popular and affordable brand, Lada, whose AvtoVAZ manufacturer was majority-owned by the Nissan-Renault group, fell 84 percent to 6,000 units year-on-year.

Car production was also hit hard, falling by 85.4 percent year-on-year.

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Sanctions block main supply chains

The West slapped Russia with debilitating sanctions after the start of Moscow's military campaign in Ukraine in February, and sales of new cars have been falling since March as sanctions blocked main supply chains.

The country's car industry depends on global supplies, and top western carmakers led by Renault either suspended operations or left Russia since sanctions took effect.

In May, Renault handed over its local assets to the Russian government, marking the first major nationalisation since the onset of sanctions.

Renault controlled 68 percent of AvtoVAZ but was under pressure to pull out of the country.

Numerous carmakers have stopped sales of their cars or parts to Russia including Audi, Honda, Jaguar and Porsche, while those that have halted Russian production include BMW, Ford, Hyundai, Mercedes, Volkswagen and Volvo.

Last week the statistics service said the country's industrial output shrank for the first time since the start of the military campaign, falling by 1.6 percent in April compared to the same period last year.

Faced with a shortage of imported parts in factories, authorities eased safety and emission standards for locally produced cars in May, including dropping the requirement for airbags.

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Source: TRTWorld and agencies