Support The Moscow Times!

Car Sales Sink 49%, Seen Level This Year

The Russian car market sunk by 49 percent last year, with annual sales falling to 1.47 million and expected to stay roughly the same in 2010, the Association of European Businesses said Thursday.

The industry had been booming before the economic crisis hit in the fall of 2008, even surpassing Germany as Europe’s largest car market in the first half of that year. But demand has since crumbled, and Russia’s largest carmakers are struggling to remain competitive against foreign brands.

AUTO SALES

Company2009% Change From 2008
AvtoVAZ
346490-44
GM group
141695-58
VW group
94018 -28
Ford Group
88977 -57
Toyota group
75131 -63
Hyundai
74607 -61
Renault
72284 -33
KIA
70088-20
Nissan group
68851-55
GAZ group
58205-56
Total cars sold
1465917-49

Car model
2009% Change From 2008
Lada Priora
99473 -22
Lada Samara 90428 -46
Lada 2105/2107 67216 -60
Lada Kalina 60746 -35
Renault Logan 53869 -27

— AEB

AvtoVAZ retained its spot as the country’s best seller, with four of its Lada models taking the top four spots for a combined 22 percent of the market. Renault’s Logan was the most popular foreign brand, taking fifth place overall, AEB said in a report.

Nine of the 10 best sellers were made domestically. The Uzbek-made Daewoo Nexia was the only exception, placing eighth.

Even with government efforts to stimulate demand, Russia’s car market performed worse than those of other countries, with year-on-year declines of up to 60 percent in some months, David Thomas, head of the AEB’s auto committee, said in the report.

The government raised import tariffs in early 2009, particularly for used cars, which had competed with some new Russian models in the budget segment. In addition, the government introduced a subsidized loan program for Russian-made cars and is planning to start an experimental “cash-for-clunkers” program on March 8, Industry and Trade Minster Viktor Khristenko said Monday.

Sales fell by 44 percent at AvtoVAZ, Russia’s largest automaker, and by 56 percent at GAZ Group, the country’s No. 2 producer. Popular foreign brands were also all down, with drops ranging from Hyundai’s 61 percent to 20 percent for KIA.

Luxury brands performed better than average, with BMW sales dropping by 11 percent, Audi by 12 percent and Mercedes by 28 percent.

Industry experts do not expect any recovery in 2010, and AEB expects total annual sales of 1.4 million to 1.5 million cars and light trucks, with growth occurring in the second half of the year, Martin Jahn, the committee’s deputy chief, said in the report. “The prognosis is rather optimistic and counts on measures like subsidized loans and cash-for-clunkers initiatives to be effective,” he said.

Russian carmakers are not as pessimistic about 2010, with GAZ Group president Bo Andersson hoping for 13 percent growth, he told Reuters this week.

AvtoVAZ has said it hopes to sell 470,000 cars this year. If it maintains its total market share of 23.8 percent, that would imply a Russian car market of 1.97 million cars, a 34 percent increase from 2009.

Total auto production in Russia fell by 59.7 percent in 2009, ASM-Holding, which tracks the auto industry, said in a report Thursday. Passenger car output declined by 59.4 percent, to 596,857 units, of which 53 percent were Russian brands. Production of domestic brand cars fell by 63.9 percent, while production of foreign brands dropped 52.7 percent, the report said.

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more