Russia’s Cars Driven Away from the Market
Russia’s cars continue to yield domestic market to cars of foreign make. Both the RF Industry and Energy Ministry and Ernst & Young expect the market share of Russia’s brands to narrow from 37 percent to from 26 percent to 27 percent this year. At the same time, the foreign cars will expand to 60 percent. The analysts say the trend will survive in 2008 and a certain slowdown in sales of new foreign cars could be expected no sooner than in two or three years.
The market share of Russia’s cars is forecasted to narrow by 10 percent to from 26 percent to 27 percent in 2007, Deputy Industry and Energy Minister Viktor Semenov announced yesterday. Analysts of Ernst & Young gave similar figures, specifying that new cars of foreign make are winning the market from Russia’s cars. They will expand by the same 10 percent or 11 percent to 60 percent this year, and the used foreign cars will cover the remainder (13 percent), people in Ernst & Young forecasted.
In terms of Russia’s sales, the local brands will be the sole losers in the country, according to Ernst & Young. This year’s decline will reach 3 percent, while new foreign cars will grow 62 percent and used cars of foreign make will step up 32 percent.
The root cause of such drop is reduction in AvtoVAZ sales in Russia due to the obsolete lineup and ruble appreciation. According to analysts of IFD Kapital, this domestic decline won’t affect overall sales of Russia’s automobile giant, which are estimated to step up to 740,000 cars this year vs. 720,000 a year earlier. In Ernst & Young, they explained that AvtoVAZ redirected the cars to foreign countries, first of all to CIS and emerging markets.
Overall, some 2.78 million cars will be sold in Russia in 2007, Ernst & Young forecasted. Of this number, new cars of foreign make will account for 1.65 million, used foreign cars - 380,000, Russia’s brands - 750,000. The market will grow by 33 percent and its worth will reach $45 billion this year, including $34 billion to be ensured by new foreign cars.
www.kommersant.com
All the Article in Russian as of Dec. 20, 2007
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