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Russia’s automotive market last year for the first time exceeded the pre-crisis level – by one percent as to the number of new vehicles sold, and in terms of prices, by nearly 20 percent. Although the products of Russia’s largest car manufacturer still feature on top of the list, the sales of domestically engineered and manufactured cars are steady on the decline.
The European Business Association on Tuesday published its statistics on the sales of new cars in Russia in 2012 and in December. The number of motor vehicles, both cars and commercial ones, sold in Russia in the whole of last year reached 2.935 million, which is 10.6 percent more than in 2011. Good sales in the first half of 2012 contributed to this. Toward the end of the year the market growth stalled. Whereas in the first months it was over 20 percent, at the end of December the sales of new cars were up by a tiny one percent to 253,000.
Yet the market set a new record to have surpassed the parameters of pre-crisis 2008, when 2.918 million cars and commercial vehicles were sold. In qualitative terms the surplus over the pre-crisis parameters was a mere 0.6 percent, but in cash terms the market, evaluated in the soaring dollar, was up 19 percent. According to Ernst and Young, quoted by the daily Vedomosti, 2012 saw 74.9 billion dollars worth of new cars and commercial vehicles sold in Russia, in contrast to 63 billion dollars worth of new cars in 2008.
The average price of a sold motor vehicles over the past four-five years grew by at least 5% and 2012 witnessed no decline in the prices of new cars after Russia joined the WTO. The reduction of import taxes from 30 percent to 25 percent was offset by the introduction of the disposal tax.
Russia’s AvtoVAZ remained the market’s leader with 537,600 cars sold. However, although it retained first place as to the number of sold vehicles, the flagship of the national automotive industry was the sole one in the top ten that showed a decline. Its sales were down by 7 percent, and the share of the market shrank from 21.8 percent to 18.3 percent.
In the foreign makes group Chevrolet stayed number one, just as it was in 2011, with 205,000 cars sold (18 percent growth). Renault propelled itself to second position to have increased sales by 23% to 189,800 cars, and Kia was third with 187,300 (23 percent growth). The French concern outperformed Hyundai, which in 2011 lagged behind Chevrolet by a tiny 10,000 cars, and now it is fourth (174,200 cars sold) to have increased sales by 7 percent.
Most popular brands improved their performance or retained the previous share of the market, says the daily Kommersant. Chevrolet now has 7% against 6.5 percent in 2011, Renault, 6.4 percent against 5.8 percent, and Kia, 6.3 percent against 5.7 percent.
Volkswagen expanded its market segment considerably (from 4.4 percent to 5.6 percent). Its sales were up 40 percent to 164,700 cars. Toyota sold 153,000 cars (28 percent more) to have increased its share from 4.5 percent to 5.2 percent. In the most popular brands group Fiat suffered the worst slump - from one percent to 0.3 percent.
Lada Priora was last year’s best seller. Avtovaz managed to market 125,900 these cars, but its sales slumped by 9 percent as compared with 2011. The car maker’s new model Lada Granta placed second with 121,100 sold vehicles.
Hyundai Solaris retained its leadership among the foreign makes, with 110,700 cars sold (14 percent growth), followed by Ford Focus and Kia Rio. Some low budget models showed a considerable slump last year – Renault Logan, by 28 percent, Chevrolet Lacetti, by 17 percent, and Daewoo Matiz, by 13 percent.
According to the chief managing director of the retailer Rolf, Tatyana Lukovetskaya, who is quoted by the RBC Daily, the Russian automotive market this year may become the largest in Europe, even larger than Germany’s.
“According to our pessimistic scenario, sales will reach 3.01 million vehicles showing 1.5 percent growth as compared with 2012, but according to the optimistic scenario the growth may be bigger, 7.4 percent to 3.19 million cars,” Lukovetskaya said.
“In 2013 we expect to see market stabilization. By and large its parameters may remain at a level of 2012,” the Sollers company said.
Automotive market experts are not surprised the largest Russian car manufacturer is losing clients. For two years in a row, in 2012 and 2011, AvtoVAZ benefited a great deal from the old cars disposal program. Each car owner was then offered to hand in the old car for disposal to get a 50,000 ruble bonus in exchange to purchase a new vehicle, but only of Russian manufacture.
The junk car bonus period is over and AvtoVAZ now has to play by the free market rules. Russian cars are obviously inferior to their foreign counterparts. Whereas three years ago purely Russian brands accounted for 50 percent of sales, now the share has been down to 30 percent.