Currency converter
News Feed
News Search Topics
Use filter
You can filter your feed,
by choosing only interesting

Expert Opinions

This content is available for viewing on PCs and tablets

Go to main page

Russian car market used to see better times

January 30, 2014, 15:16 UTC+3 Alexandrova Lyudmila
© ITAR-TASS/Andrei Kholmov

MOSCOW, January 30. /ITAR-TASS/. Russia's automotive market is in the doldrums, though it still ranks second in Europe by sales. Manufacturers and dealers had especially hard times in 2013, when car demand dropped by a total of 5%. And experts are at one in thinking 2014 will bring no improvements. Prospects are bright only for Russian-made foreign cars.

After three years of continuous growth the Russian car market slumped in 2013: according to PricewaterhouseCoopers (PWC), over the year new car sales in Russia declined by 5.5% in unit terms to 2.6 million and by 3% in monetary terms to $69 billion. Chairman of the Association of European Businesses (AEB) auto association Joerg Schreiber estimates car sales a bit higher, at about 2.78 million.

Experts explain the fall with wobbly economic situation in Russia, as well as decreasing consumer confidence and tough situation in the Russian budget cars segment.

By PWC estimates, imported car sales in monetary terms decreased by 15% to $28.5 billion last year, while showing a 17% fall to 813,000 in unit terms. Russian brands also fared poorly recording a 12% (to $5.9 billion) and 16% decline to 487,000 cars respectively.

Negative dynamics in Russian brands primarily resulted from modernization and renewal of the model range at the Russian car manufacturing leader AvtoVAZ, which saw a 12.1% fall in sales, whereas PwC experts say the manufacturers Lada model sales slid 33.2%.

Meanwhile, according to the Federal State Statistical Service, 1.9 million cars rolled off Russian assembly lines in 2013, which means a 2% fall year-on-year. AvtoVAZ cut output by 20.6%.

Russian-built foreign cars were the only growing segment last year that increased 12% to $34.6 billion and 9% to 1.31 million in unit terms.

Moreover, foreign manufacturers continued to expand the range of models for assembly in Russia (Toyota Land Cruiser Prado, Chevrolet Aveo, Hyundai i40, Hyundai Equus, Citroen C4 седан, Mazda6, Chevrolet Trailblazer, new Skoda Octavia, Mitsubishi Pajero Sport, Luxgen7 SUV and others).

New model production launched and start of supplies to the CIS helped some Russian assembling plants boost output, despite generally slack demand in the domestic market. For instance, Hyundai’s plant in St. Petersburg manufactured 229,400 cars, plus 2.4% year-on-year. Renault’s facility in Moscow also broke its own record with an output of 198,546 cars (+19%). Toyota Motor’s plant made 35,685 Toyota Camry (+25%), the best performance since the plant opened in 2008. Nissan’s facility in St. Petersburg produced 47,105 Nissan Teana, X-Trail and Murano, 8.2% more than a year earlier.

As for this year’s prospects, analysts agree the decline will go on, though differ over the figures. PwC experts forecast a 3% fall, with sales of Russian brands likely to slip 6% and the import of new cars expected to fall 12%. Only Russian-built foreign cars are projected to grow by 4%.

Late last year an interim forecast was released by the AVTOSTAT analytical agency that predicts a 5% fall. Meanwhile, AEB envisages a 1.6% decline in new car sales.

Expert of the Russian Governmental Analytical Center Vadim Finogenov quoted by the Nezavisimaya Gazeta daily sees no reasons for any sharp movements in the car market: “New car sales will most likely post zero or around zero growth. Demand will be under pressure of weak real income growth and stricter terms of car lending.”

Neither will customers’ preferences change much in buying and changing cars: “Wealthy citizens will buy expensive foreign cars, while choice for citizens with average incomes will be among AvtoVAZ’s cars, Renault, Kia, Hundai. The Volzhsky Automobile Plant, when it is through with switching over to new models may stabilize car sales at the 2013 level, though it will face fierce competition by foreign cars in terms of price/quality ratio.” However, he added, “ruble devaluation will, undoubtedly, lead to foreign car price growth and, accordingly, improve Russian manufacturers’ competitive edge.”


ITAR-TASS may not share the opinions of its contributors