New Market Research Report: Russia Autos Report Q4 2010

Sept. 10, 2010 - PRLog -- Vehicle sales in Russia have been on the rebound thanks to ongoing government support in the form of the scrappage programme. Car sales in June rose 45% year-over-year (y-o-y). Total vehicle sales reached 174,838 units during the month, according to the Association of European Businesses. The big jump marked yet another consecutive month of solid sales growth. In May, Russian car sales climbed 31% y-oy, although sales decline marginally compared with April.

Sales have been recovering since April on the back of the vehicle junk scheme launched in March 2009. That programme gives buyers RUB50,000 if they trade in a car over 10 years old. The government launched the scheme with the aim that it would result in 200,000 new car sales this year. It launched the second phase of the scheme at the end of June 2010, pledging an additional RUB10.5bn (US$340mn) to the programme. Consequently, BMI expects the bounce in sales to continue, with total sales nearing 1.6mn units this year.

Domestic carmakers have benefited from the car scrappage scheme, which applies only to purchases of Russian-produced vehicles. In April, nine of the top 10 selling brands in Russia were locally produced. The biggest winner so far has been AvtoVAZ, which makes the Lada. AvtoVAZ's April sales reportedly surged 54% y-o-y, to 34,136 units. So far this year, domestic brands appear to be gaining on their foreign rivals. Based on sales in the first four months, GAZ and UAZ have returned to growth, while General Motors Company (GM), VW and Hyundai Motor were still posting declines. Any gains recorded by Russian brands should be viewed positively, especially when considering that total sales in the January to April 2010 period were down 13% from the 456,179 units sold in the same period in 2009.

The srappage scheme has also provided a boost to auto output. In the first five months of 2010, vehicle production rose 65% over the same period a year ago to 381,560 units, Reuters reported, citing figures from industry body ASM Holding. However, better availability of auto financing has also played a factor. At the same time, we are cognizant of the fact that after the disastrous year that was 2009, output really has nowhere to go but up.

Overall, sales will be tied to economic conditions. In this regard, there have been some positive developments recently. The availability of credit has been improving. ZAO Toyota Bank expects that by the end of the year, nearly half of all purchases will be financed with loans. If these estimates pan out, then the auto loan market is set to expand 19% y-o-y in 2010. On the negative side, though, are the fundamentals weaknesses of Russia's economy, which include low productivity, corruption and weak infrastructure. A demographic decline may also worry car dealers in the long term, as the population ages.

Despite these factors, we are positive on the five-year outlook. There is plenty of growth potential in Russia when it comes to the size of the market and rates of economic growth, especially when compared with more mature markets in Western Europe. The central bank has also been steadily cutting interest rates, which now stand at 7.75%. Demand for automobiles is closely linked to consumer confidence, disposable income and the availability of financing, all of which tend to receive a boost from lower interest rates. Consequently, BMI forecasts sales and production gathering pace next year and posting yo- y growth of 17.3% and 8.8%, respectively, in 2011. By the end of 2014, we expect output to exceed pre-crisis levels and for total sales to top 3mn units.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/83026_russia_autos_report_q4_2...

Report Table of Contents:

Executive Summary
SWOT Analysis
- Russia Auto Industry SWOT
- Russia Political SWOT
- Russia Economic SWOT
- Russia Business Environment SWOT
Regional Overview
- BMI Stands By Domestic Demand Side Story View For Emerging Europe
- Standing By The Domestic Demand Side Story
Business Environment Ratings
- Table: Western Central And Eastern Europe Business Environment Ratings
Industry Forecast Scenario
- Production And Sales
- Table: Russia Automotive Production
- Table: Russia Automotive Sales
- Commercial Vehicles
- Trade
- Table: Trade
- Table: Russia - Economic Activity
Competitive Landscape
- Regulation
- Manufacturers - Foreign Brands
- Table: Russia - Current And Planned Investment By Foreign Automakers
- Table: Fiat - Subsidiaries In Russia
- Manufacturers
- Commercial Vehicles
- Table: New Truck Imports By Brand
- Suppliers
Company Monitor
- PSA Peugeot Citroen
- Financial Woes
- Focus On Faurecia
- Merger Opportunity
- Eye On Eastern Europe
Company Profiles
- AvtoVaz
- Kamaz
- RusPromAvto
- Kia Motors
- Renault
- Sollers
- Taganrog Automobile Plant
- Ford Motor
- Toyota Motor
- General Motors Company (GM)
Country Snapshot: Russia Demographic Data
- Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Section 2: Education And Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
- Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Wages, 2000-2006
BMI Methodology
- How We Generate Our Industry Forecasts
- Sources

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.