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Light Vehicle Sales in Russia in 2009: Back to the 5th Place in Europe
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Light Vehicle Sales in Russia in 2009: Back to the 5th Place in Europe

Fri, 15/01/2010 - 00:00

Hopes that Russian automotive market would become the largest automotive market in Europe were completely crashed by the results of 2009. According to the Gravitas Research estimates sales of the light vehicles in Russia experienced whopping 49 per cent drop compared to record high 2008 sales and reached only 1.4 million vehicles sold in 2009.

Struggling real sectors of the Russian economy, significant reduction in automotive financing and its availability, frozen growth of disposable income of the Russian consumers, and increased custom tariffs on import of foreign vehicles in Russia were among the key factors that determined fall in light vehicle sales in Russia. Though Russian Government demonstrated number efforts to support automotive industry in Russia, measures undertaken were utmost sufficient to keep selected Russian OEMs afloat during turbulent times. Therefore, Russian automotive market is back to the level of 2005 when sales of the light vehicle reached similar level of 1.4 million vehicles.

Graph 1. Light Vehicle Sales (Russia), 2005 - 2009

Gravitas Research _ light vehicle sales in Russia 2005 2006 2007 2008 2009 car sales _ Russian automotive market research

Foreign brands in Russia appeared in the tough conditions during the whole 2009 with average monthly sales drop of 51 per cent. As economic recession in Russia was progressing during 2009, drop in sales of the foreign brands in Russia reached its peak in July when foreign brands in Russia were able to sell only 37 per cent of what was sold in July 2008 (according to the data of Association of the European Business in Russia). August 2009 become the first month when situation on the Russian automotive market started to turn for better for foreign brands. With 37 per cent of the sales level of 2009 in August, foreign brands were able to recover already 52 per cent of the sales in December 2009 averaging 2.5 per cent growth in the second half of the 2009.

Graph 2. Sales of Foreign Light Vehicles by Month (Russia), 2008-2009

Gravitas Research _ foreign light vehicle sales in Russia by month 2008 2009 car sales _ Russian automotive market research

Unsatisfactory sales of light vehicles in 2009 have moved Russian automotive market back to the 5th place in Europe behind Germany, France, Italy and UK. Hopes of the Russian automotive industry stakeholders in possibility of this market becoming the largest in Europe were already broken in 2008 and disastrous vehicles sales in 2009 delayed further realization of such hopes.

Table 1. Top 5 European Light Vehicle Markets, 2009

Gravitas Research _ top 5 automotive markets Europe light vehicle sales Russia Germany France Italy UK 2009 car sales _ Russian automotive market research

According to Gravitas Research estimates, Russian automotive market is expected to reach level of 2008 vehicle sales only by 2013-2014. Nevertheless, pace of the vehicle sales recovery quite significantly dependant on the measures to be undertaken by the Russian government in 2010 and consequent years. Implementation quality and magnitude of the vehicle scrapping scheme, vehicle import tariff policy, subsidies to the local OEMs, and healing of automotive financing are among the key factors that determine pace of the recovery of the Russian automotive market in the next 5 years.

To find out more on the results of the sales on the Russian automotive market, contact Gravitas Research analytics team.

About Gravitas Research:
Gravitas Research is a specialized market research and consulting company, headquartered in London, UK. We publish premium market research reports, business analytics and industry analysis of the Russian, CEE and CIS industries and markets

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