Renault-Nissan is forecasting the market for Russia this year to be “relatively flat” as the hitherto booming automotive sector starts to plateau in relative terms.
The vast country sold almost 3m passenger cars and LCVs last year, but this is expected to dip slightly as the market faces challenging economic conditions, with some forecasting a nonetheless robust total of 2.95m sales for 2013.
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State Duma [Parliament] Expert Council Committee chairwoman, Alfiya Kogogina recently told the Russian Automotive Forum (RAF) in Moscow it was “not a secret” peak volume demand would soon be reached, a view echoed by Renault-Nissan at last week’s Automotive Supply Chain Magazine Congress 2013, at the Silverstone race circuit in the UK.
“This year the forecast will be relatively flat – Russia goes in cycles,” Renault-Nissan-Dacia manager, outbound engineering alliance logistics Europe, Chris Godfrey, told the Congress at the home of British Formula 1 racing.
“High-end purchases are dropping off and medium purchases are increasing – for us if the demographics change it is good. In terms of the former CIS [Commonwealth of Independent States], the evolution of low-cost brands such as Dacia will help the market expand a little bit [but the] CIS is starting to suffer from the same problems as Western Europe.”
Despite the topping out of the market, there are nonetheless considerable opportunities that remain in Russia for automakers, who view replacing ageing models as a potential growth sector.
“Yes, the shine has gone [but] if you drive outside Moscow, there are a lot of cars to change,” STS Logistics Group CEO, Marc Brenneiser, told the Congress. “The parts market is growing and we expect 15%-20% growth this year.
“I don’t talk about crisis – it is a challenging market – it will not have 20%-30% growth rates again.”
The logistics group CEO highlighted how doing business in Russia was often “a day of surprises,” with laws able to be changed at a rapid rate.
For his part, Godfrey noted the business environment was becoming easier, although added: “I would be a lot happier if I had more Western suppliers in Russia without joint ventures, to bring competition to the market.”
