* New car sales down 38 percent in February year-on-year
* Decline to continue in coming months
* 40-50 percent drop seen for full year
* GM, Renault, Hyundai, Nissan, Toyota among worst hit
(Adds analyst comment, details, background)
By Simon Shuster and Olga Borodina
MOSCOW, March 11 (Reuters) - A collapse in the Russia car market deepened last month with sales down 38 percent year-on-year after a 33 percent fall in January and the downward spiral was set to continue, data showed.
Sales of the 10 best-selling brands slumped 11-49 percent in February with global auto majors GM, Hyundai and Toyota among the biggest losers.
"Because of the increased customs tariffs, high loan interest rates and the rouble devaluation we can expect a further price increase and decline of the automotive market in Russia in the coming months," said Martin Jahn, vice chairman of the Association of European Businesses (AEB) which compiles monthly statistics on the Russian car market.
For the full year, 40-50 percent fewer cars will be sold than in 2008, said Ivan Bonchev, automotive analyst at Ernst & Young in Moscow.
"Earlier we believed 2009 would see a decline of 20-30 percent, but clearly things are not getting any better," Bonchev said. "It is hard to predict when the market will hit bottom, but I think this year will be the hardest."
Economists use car sales as an indicator of whether consumers are confident enough in the economy's future to spend money now rather than squirrel it away.
Vehicle sales in Russia, which was set to become Europe's largest car market in 2009, began to contract sharply late last year when the price of consumer credit soared due to the global banking crisis.
In the same period, the value of the rouble fell by about a third to the dollar, putting the cost of imported vehicles out of reach even for relatively well-off Russians.
Then, in an effort to protect local car makers such as AvtoVAZ, the government imposed an import tariff on new automobiles in January, lifting the price of some imported models by as much as 25 percent.
These factors have yet to felt in full, said Bonchev, because there was a stockpile of cars imported before the tariff was enforced. In the coming months, these stockpiles are set to dry up, raising the price of imported foreign models dramatically.
"March could be even worse, because the new prices will already be in place," he said. Carmakers who produce or assemble vehicles in Russia, such as Ford and Hyundai, could then begin to feel a competitive advantage over peers that import cars, he added.
A small reprieve for the market could come from a state initiative to subsidise car loans. Last month, it vowed to earmark $55 million of this year's federal budget to compensate banks for charging lower rates on the loans to consumers.
"But the amount is of course very small. It won't provide much momentum," Bonchev said.
Following are February sales for the top-10 car brands in Russia compared with the same period of 2008, as well as total figures for car sales in the first two months of the year 2009 and 2008: BRAND Feb 09 Feb 08 percent Jan-Feb 09 Jan-Feb 08 percent LADA 29,344 46,197 -36 58,454 92,821 -37 Chevrolet* 10,870 21,755 -50 20,881 35,508 -41 Ford 10,497 13,942 -25 18,449 23,695 -22 Hyundai 7,669 16,743 -54 15,139 29,441 -49 Nissan 7,364 13,102 -44 13,615 21,665 -37 Toyota 6,522 11,377 -43 13,849 22,016 -37 Renault 5,465 8,495 -36 8,718 14,186 -39 Mazda 4,927 5,703 -14 8,408 9,465 -11 Kia 4,676 6,792 -31 8,311 13,238 -37 Opel 4,244 7,301 -42 8,055 13,103 -39 ---------------------------------------------------------------------- Total 134,912 218,748 -38 252,314 392,698 -36 ---------------------------------------------------------------------- * Chevrolet sales include GM-Avtovaz joint venture.
NOTE - To see a full list of foreign car sales in Russia, click http://www.aebrus.ru/committees/industrial/automobile/
- Source: AEB Automobile Manufacturers Committee. (Editing by David Cowell)