Russia’s Association of European Businesses (AEB) says it will wait until after the first quarter before issuing its guideline forecast for this year’s sales figures, but remains reasonably optimistic for 2018.
The Moscow-based body’s Automotive Manufacturing Committee (AMC) has welcomed what is now more than a year of consistently improving numbers after a disastrous previous 48 months, but is keen to temper its comments with a conservative leaning.
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“We have not made an official forecast yet, but we may do so after the first quarter,” AEB AMC chairman, Joerg Schreiber told just-auto in Moscow. “We know there is a little bit of metal shifting, but finally after that long stretch of bad news, many manufacturers [are] growing back their volume base.
“The market did perform better than most – including myself – would have predicted. The government is making up its mind about import tariffs or non-tariffs they will apply this year – I guess the general consensus will be positive. Nobody is ever sure when it comes to Russia – there could be a big political event internationally getting in between.
“Notwithstanding such external events, markets should be good, [while] low bank rates should go down. That all points in the right direction and I would be surprised if the market would go down two digits [again]. We had a rather prominent dealer group go bankrupt – a strain of many years of crisis – so there is a much bigger concern in the market – at least from me – in this area.
“There are not so many potential operators willing to engage [in] that sort of business – we are talking about a limited number of players in the market.”
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By GlobalDataThe Kremlin is currently evaluating how to proceed with a replacement for Decree 166 mandating a certain level of domestic content for overseas OEMs in Russia and has to look to attract foreign investment and retain domestic component production.
One real spark of light for Russian suppliers and OEMs however, has been the positive side-effect of previously plunging rouble exchange rates. While spelling tough times economically for Russian citizens and serving up a Siberia-sized headache for overseas importers into the country, the devalued currency provided a timely competitive advantage for those companies denominated in roubles.
That period however, is now ending as the slow recovery of the Russian economy is seeing a more stable rouble, eroding some of that previous advantage.
“There is an ongoing [Decree 166] discussion – which direction to go and there is also no consensus in the industry,” added Schreiber. “That is still on-going. One thing is for sure, the Russian government is very interested in retaining investment in the country and bring [in] more investment. That attitude has not changed.
“Of course the higher the rouble gets, the tougher it gets to respond to market opportunities outside Russia, but the positive effect is here on the domestic market. We have never had this stable currency environment and the rouble is floating. That kind of stability gives peace of mind, which has contributed to the pace of recovery. There is nothing to indicate that should change this year.
“Nobody would have expected consumer inflation would go down to 3%-4% in 2017 – nobody had that on the radar. It is adding to the positive momentum, not just automotive. Give it one or two years, then at least we should be back in the region where the UK market is or even better when it comes to automotive sales.”
