Car Shopping Frenzy: Russians Invests in Porsches, Audis to Maintain Personal Wealth vs Falling Ruble

Russians are going car shopping frenzy these days, purchasing every grand automobile brand -- Porsche, Audi, Lexus and Mercedes available on the market to maintain their personal wealth as the ruble continues to plummet and tumble. Since Nov 1, the ruble has tumbled 19 percent against the dollar, as a result of the sanctions slapped by the U.S. and its western allies to Russia for its alleged involvement in the Ukraine crisis. Wanting to preserve their individual savings for further eroding, Russians turned to the automobile market.

Sales of the Porsche vehicles, particularly the Cayenne crossover model, rose a whopping 55 percent in November, while demand for Lexus grew 63 percent year-over-year, according to data gathered by Bloomberg. Regardless of price, whether budget or premium, cars are being "sold like hotcakes currently," Tatyana Lukovetskaya, chief executive officer of Rolf Group, one of Russia's largest auto dealers, told Bloomberg. It is worthy to note that these automobiles aren't being sold on promos. Their price tags didn't go down and are priced $50,000 to $100,000 and more.

Russians are spending not because it is Christmas but they are shopping to beat the high inflation and a declining ruble currency. A personal wealth of 1 million rubles nowadays is only worth about $18,600, slashed by about $4,650 since Nov 1.

According to Rolf Group, cars are a good buy these days because their prices only jumped 5 percent to 7 percent in the fourth quarter, compared to the Russian consumer-price inflation which hit 9.1 percent in November. "In times of crisis, people view cars as an investment," Andrei Rodionov, the head of corporate communications at Mercedes-Benz's Russian unit, told Bloomberg. "The rule of thumb that a car loses 20 percent of its value once it leaves the showroom isn't valid anymore."

This is probably true. A banker for a top Russian bank had just recently bought an Audi A7 coupe in November. He only paid the equivalent of $40,000 less for the car than if he had gotten it earlier. In the United States, an A7 sells for a minimum $65,900. In Russia, at current rates, its going for only $47,000.