A Russian analyst is estimating the market will grow between 12% and 14% this year to 1.9m car sales as the country’s pace of recovery continues to eat away at the deficit of the recent downturn.
Addressing delegates at the recent Russian Automotive Forum organised by Adam Smith Conferences in Moscow, analysts queued up to highlight the ongoing rebound in the market, albeit lacing their remarks with caution surrounding future forecasts.
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“Yes, the market is picking up,” Russian Automotive Market Research general director, Tatyana Arabadji told the Moscow conference in the city’s famous Hotel Ukraina opposite the Prime Minister’s White House building.
“We lost GM and a number of other production facilities have shut down. Localised cars account for around 86% because government strategy is definitely to pursue localisation and import substitution.
“We think the market will grow by 12%-14% – this is just cars. In the mid-term the market and production will recover. We see some downturn [however] – in 2022/23 we can have worse results than 2021. We think car sales will be around 1.9m [this year]. The reason we don’t see factors for dramatic increase is the level of modernisation is very, very high in Russia.
“Given our current GDP levels [and] 310 cars per 1,000 people, the market is not going to grow; it has reached saturation point. Also we have [a] very well developed market for used cars.”
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By GlobalDataThe Russian analyst noted the continuing popularity of SUVs in the country, with the sector increasing its share of the market from 38% to 42%, driving diesel sales.
Russian exports were mainly to neighbouring Kazakhstan and Belarus, although the former market is shrinking.
“We believe our markets are still smaller Soviet Republics,” added Arabadji. “For obvious reasons Ukraine is no longer an option, [while] we face competition from local manufacturers, for example, Kazakhstan and Belarus.
“At least we were able to be successful with import substitution and this gives us potential for developing the car component and raw materials sectors. By deploying production in Russia it is more stable.
“There are prospects – they may not be that great but it is still an interesting market.”
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 outlook.
