If there was a theme to come out of the first day of the Paris motor show – apart from the omnipresent insistence on electric vehicles – it was that Russia was coming in from the cold.
The country has endured a catastrophic slump in sales that made its European counterparts pale in comparison – but renewed optimism – coupled with that fabled shorthand template of the ‘middle classes’ is provoking quite a stir among the Paris show-goers.
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Russia’s emergence from the deep freeze is clearly to be welcomed and the percentage increases look encouraging, but they have to be weighed against the recent downturn that is still very fresh.
This enormous country – seemingly still not beset by western obsessions with environmental strictures – has been starved of quality product as the recession bit there as hard as anywhere else in Europe – but according to producers at Paris – is now crying out for more sophisticated car brands.
New car ownership in Russia still lags significantly behind that of western Europe – 260 cars per 1,000 – over half the vehicles in a typical Russian car park are over 10 years old.
It’s not all plain sailing of course, but the number of western manufacturers who have stuck by Russia in co-operation of various sorts speaks volumes – although that has to be laced with caution.
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By GlobalData“It [Russia] will probably continue to be volatile – it slumped from a psychological perspective as people had already gone through three crises in the 1990s,” former Toyota Motor Russia vice president and current VP Lexus Europe Andy Pfeiffenberger told just-auto in Paris.
Russia’s top end brands remain relatively untouched, noted Pfeiffenberger but the the lower point of the market has seen some dramatic changes as consumers look for added value.
But it is not just price driving the Russian consumer. Badging forms a crucial element of a purchase decision.
“Brand image in Russia is huge,” said Pfeiffenberger. “We have benefited from the love-hate relationship between the US and Russia.”
Russia will clearly not deliver enormous numbers as yet. But its emergence from a deep and prolonged recession – coupled with a relatively relaxed regulatory environment – should ensure producers take full advantage of any upturn.
