Foreign models assembled in Russia showed the best growth among the other categories of passenger cars, expanding their market share to 44%
Moscow, 22 January 2013. Today PwC Russia Automotive Practice Leader Stanley Root and Automotive Practice Senior Manager Sergey Litvinenko tallied the Russian automotive market’s results for 2012. In addition to the traditional overview of the passenger car market in Russia and worldwide, they also commented on the costs of car ownership and the new law on passenger car scrappage.
Following several years of severe sales volatility in the automotive market, some signs of stabilization have appeared. In 2012, the market posted double-digit growth rates with annual sales exceeding the 2008 results. For instance, total new passenger car sales increased 10% while revenues grew 21% year on year. Foreign models assembled in Russia showed the best growth among the other categories of passenger cars, expanding their market share to 44%.
The Russian automotive market is currently showing signs s of stabilization, which forms the foundations for sustainable growth over the long term. If it continues, this trend will have a positive impact on all market players since it would enable them to plan more effectively and cut costs in the long term. We forecast 5% growth in Russia's passenger car market in 2013.
We forecast 5% growth in Russia's passenger car market in 2013.
Scrappage of old and broken-down vehicles in Russia's car population remains an important issue. Close cooperation between three parties – the government, car manufacturers and business - could help develop scrappage infrastructure, which is necessary for long-term growth in the domestic automotive market.
Overall car ownership costs are higher in Russia than in developed markets such as the UK and USA, which represents one of the main obstacles to further growth in the Russian automotive market. The most significant aspects of personal car ownership costs in Russia include insurance and loans, which are much higher than in other countries, and fuel costs.
Reducing the cost of car ownership is in the interests of all market players because it would boost sales of vehicles, accessories and related services, as well as facilitate improvement in the car population thanks to the replacement of older models with more efficient and environmentally friendly vehicles.
|PwC Russia is a Partner of the XXII Olympic Winter Games and XI Paralympic Winter Games to be held in the city of Sochi in 2014