Dec 18, 2014
As rouble erodes, Russians buy out last remaining luxuries
Dec 18, 2014
MOSCOW, Russia - The glittering Jaguars and Land Rovers parked on the showroom tiles at Rolf car dealership in Moscow looked like a steal, still priced in last week's roubles. But by Wednesday you were probably too late.
Russians have been racing to buy cars, electronic goods and designer clothes with their swiftly devaluing roubles. But some international firms have suspended supplies of luxury items, at least until the currency stabilises.
Shoppers trying to buy iPads or iPhones on Apple's website were getting a "We'll be back" message. With the rouble falling on Tuesday at its fastest rate since the catastrophic 1990s, Jaguar and Land Rover announced that they had suspended deliveries of cars to Russian dealers, at least until Friday.
"It is more profitable for both automobile producers and dealers to stop sales at a moment of currency instability and wait until the situation stabilises," said Oleg Datskiv, the general director of online automobile portal Autodealer.ru
Speaking on behalf of Rolf which has several dealerships around Moscow, one salesmen said there was little left to sell: "The cars in stock are either in the process of selling out, or already have."
That hasn't stopped people from searching. Lyong Din, 44, a Vietnamese immigrant standing outside a Mercedes dealership in central Moscow, said he still hoped to trade his roubles for luxury imported wheels.
"This is what I'm going to spend my money on before the rouble drops further. It's an early New Year's present for my wife."
But where stocks are still available, prices are going up.
"The only thing we can do so far is raise the prices of our cars. The euro is hurting us, obviously," said Valery Kakirov, 43, a senior manager of a Mercedes Benz dealership only steps away from the Kremlin.
"You buy in euros, sell in roubles. You do the math," he said looking out onto a row of neatly parked S-Class Mercedes.
Acort, a retailers association, predicted the first months of 2015 would see price hikes of 14.5-15 percent.
"The increase in prices will be felt throughout January after the holidays and into the beginning of February. How much rouble weakness will affect prices will take a bit more time to understand," said Acort's director Andrei Karpov.
But while the crisis is hitting the middle class, Russia's very richest may not feel the pinch. At one of the ritziest Moscow auto boutiques, Ferrari salesman Valery said the crisis was not affecting sales because clients can afford hard currency prices.
"We buy and we sell in euros, so our customers know what to expect when they come in," he said standing in front of a polished red Ferrari.
© Thomson Reuters 2022 All rights reserved.