Russia Autos Report Q3 2011
Includes 3 FREE quarterly updates
BMI view that the Russian autos market is likely to see a quick recovery – on the back of an anticipated increase in government spending ahead of the parliamentary and presidential elections in 2011 and 2012 respectively – is playing out. In the beginning of April 2011, Russian Prime Minister Vladimir Putin’s announced plans to spend an extra RUB5bn (US$177.1mn) to continue the car scrappage scheme for the rest of 2011. Meanwhile, with the country’s new light vehicle sales growing 77% year-on-year (y-o-y), to 517,304 units, in Q111 (according to the Association of European Businesses estimates), we believe our end of year forecast of 2.26mn sales remains firmly on the cards.
In the medium to longer term, the country's low vehicle ownership rate (at just 239 cars per thousand people in 2010), coupled with the potential for the economy to grow at an average of nearly 4.5% y-o-y between 2012 and 2015, creates favourable conditions for new vehicle sales growth.
While this growth will lure in new autos investment, BMI had raised concerned that too much of investments could create problems of overcapacity in the country. While all these investments fall in line with the government's plans to boost automotive manufacturing and employment in the country, the government regulation could force prompt some carmakers to invest in way more capacity than required. BMI is already skeptical about Fiat’s plans to spend EUR1.6bn (US$2.3bn) towards undertaking largescale production of 300,000 cars a year in Russia, given that Fiat has a less than 5% market share in the market.
According to local reports, around 12% of companies operating in Russia believe that overcapacity problems are already beginning to surface, while nearly a fifth argue the country may face overcapacity problems in the next two years. Based on the existing investments and the level of vehicle demand, BMI forecasts Russian production to reach 3.66mn units in 2011 – more than three times the level in 2009. Meanwhile, the local carmakers have already begun looking at overseas markets, mostly through tie-ups with foreign companies. Russian truck maker KAMAZ is looking to acquire a controlling majority or a 100% stake in Belarusian counterpart MAZ while GAZ and RusAvtoProm are to jointly assemble PAZ buses in Belarus this year, with the view to gaining access to the wider CIS market.
The all-round optimism in the Russian autos segment and the government’s intent on improving the sector have move the market to the first position of BMI’s Risk-Reward ratings for the autos industry in Europe, overtaking the UK and Germany.
BMI view that the Russian autos market is likely to see a quick recovery – on the back of an anticipated increase in government spending ahead of the parliamentary and presidential elections in 2011 and 2012 respectively – is playing out. In the beginning of April 2011, Russian Prime Minister Vladimir Putin’s announced plans to spend an extra RUB5bn (US$177.1mn) to continue the car scrappage scheme for the rest of 2011. Meanwhile, with the country’s new light vehicle sales growing 77% year-on-year (y-o-y), to 517,304 units, in Q111 (according to the Association of European Businesses estimates), we believe our end of year forecast of 2.26mn sales remains firmly on the cards.
In the medium to longer term, the country's low vehicle ownership rate (at just 239 cars per thousand people in 2010), coupled with the potential for the economy to grow at an average of nearly 4.5% y-o-y between 2012 and 2015, creates favourable conditions for new vehicle sales growth.
While this growth will lure in new autos investment, BMI had raised concerned that too much of investments could create problems of overcapacity in the country. While all these investments fall in line with the government's plans to boost automotive manufacturing and employment in the country, the government regulation could force prompt some carmakers to invest in way more capacity than required. BMI is already skeptical about Fiat’s plans to spend EUR1.6bn (US$2.3bn) towards undertaking largescale production of 300,000 cars a year in Russia, given that Fiat has a less than 5% market share in the market.
According to local reports, around 12% of companies operating in Russia believe that overcapacity problems are already beginning to surface, while nearly a fifth argue the country may face overcapacity problems in the next two years. Based on the existing investments and the level of vehicle demand, BMI forecasts Russian production to reach 3.66mn units in 2011 – more than three times the level in 2009. Meanwhile, the local carmakers have already begun looking at overseas markets, mostly through tie-ups with foreign companies. Russian truck maker KAMAZ is looking to acquire a controlling majority or a 100% stake in Belarusian counterpart MAZ while GAZ and RusAvtoProm are to jointly assemble PAZ buses in Belarus this year, with the view to gaining access to the wider CIS market.
The all-round optimism in the Russian autos segment and the government’s intent on improving the sector have move the market to the first position of BMI’s Risk-Reward ratings for the autos industry in Europe, overtaking the UK and Germany.
Contents
Executive SummarySWOT Analysis
Russia Auto Industry SWOT
Political SWOT Analysis
Economic SWOT Analysis
Business Environment SWOT Analysis
Global Overview
BMI's Core Views For The Automotives Industry
Regional Overview
EU Visualises An Oil-Free Future, But Will The Industry Accept It?
Table: EU Action Plan For Electric Vehicles
Table: Europe – Top Automotive Suppliers Sales By Region (US$mn) 2010
Business Environment Analysis
Table: BMI Industry Risk-Reward Ratings For Autos In Europe
Macroeconomic Forecast
Table: Russia – Economic Activity
Industry Forecast Scenario
Domestic Sales
Table: Russia Autos Sales: Historical data and Forecast
Rural-Urban Divergence
Production
Table: Russia Autos Production: Historical Data and Forecasts
Trade
Table: Russia Autos Trade: Historical Data and Forecasts
Industry Developments
An outline of the government’s policy towards new OEMs as of April 2011
Table: Major Planned Automotive Investments In Russia*
Passenger Cars
Table: Russia Passenger Car Segment: Historical data and Forecast
Table: Russia – Current And Planned Investment By Foreign Automakers
Company Developments
Commercial Vehicles
Table: Russia Commercial Vehicle Segment: Historical data and Forecast
Industry News
Company News
Table: New Truck Imports By Brand
Suppliers
Table: Major And Developing Automotive Clusters In Russia
Competing Tyres
Company Monitor
MAN
MAN: SWOT
Company Profiles
AvtoVaz
Sollers
Taganrog Automobile Plant
Ford 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 Skip to top