Russian car sales sink 24 percent in January

FILE - In this Wednesday, Dec. 17, 2014 file photo a customer examines a car on a display at an automobile dealership in Moscow, Russia. An industry group says the Russian car market, which was on the way to become Europe's largest a few years ago, plunged by 24 percent in January. The Association of European Businesses said in a statement on Monday that the year-on-year drop in sales follows strong demand at the end of 2014, when customers were in a hurry to buy foreign cars before prices rose. (AP Photo/Pavel Golovkin, file)

MOSCOW (AP) — The Russian car market, which was on the way to becoming Europe's largest just a few years ago, plunged 24 percent in January, reflecting the deep malaise of the Russian economy.

The Russian economy has entered recession for the first time since 2009 and inflation is now at a 16-year high.

The Association of European Businesses said in a statement Monday that the year-on-year drop in sales in Russia followed strong demand at the end of 2014, when customers were in a hurry to buy foreign cars before the prices rose.

The Russian currency, the ruble, lost more than half of its value in the past year, much of it in the autumn. Russians have flocked to buy expensive durable goods and cars before retailers hiked the prices to match the current exchange rate.

"If December was a big party for many market participants, then January is the equivalent to a bad hangover," Joerg Schreiber, chairman of the association's car manufacturers committee said.

Among the biggest declines in sales is Opel, which went down 75 percent in Russia, and Citroen whose sales declined by 72 percent.

Car sales were sluggish last year as the Russian economy was entering recession but they picked up 2.4 percent in December.