Russian automotive market slump continues; recovery not expected until 2017

GM to idle plant while other OEMs cut back production

2015/05/11

Table of contents

Summary
January-March sales fall 36% and production drops 21% in 2015
Russian government bolsters auto industry with support measures
AvtoVAZ's market share shrinks to 15.5% while Hyundai Group expands to 15.1%
Passenger car production by OEM and reduction of production
Renault-Nissan-AvtoVAZ
U.S. OEMs in Russia: GM and Ford
Chinese OEMs in Russia: Lifan, Great Wall and Chery
Japanese OEM in Russia: Toyota
Commercial vehicle makers in Russia: Tata, GAZ, Scania, Isuzu, Volvo, Kamaz and others
Sales Forecast by LMC Automotive: Russian sales to drop to 1.6 million in 2015-16

Summary

Vehicle production and sales in Russia Russian vehicle sales in 2014 fell 10.3% year-on-year (y/y) to 2.49 million units (excluding heavy-duty commercial vehicles) due to the stagnant economy caused by falling oil prices and Western sanctions over the Ukraine crisis. Although the Russian government has been supporting the automotive industry with new car purchase incentives, sales remain weak in early 2015. Association of European Businesses disclosed its forecast in January 2015 that vehicle sales for 2015 would decrease 24.1% y/y to 1.89 million units. As low oil prices and sanctions will persist for an extended period, prospects for Russian auto market are unclear. LMC Automotive forecasts that market recovery is expected beyond 2017.

Russian vehicle production in 2014 dropped 13.3% y/y to 1.89 million units. With a view that auto market recovery will take long, GM announced that it would idle its plant and scale down its operations in the country. On the other hand, many other manufacturers are dealing with the sluggish sales by significantly reducing their production.

Related Reports: Subsidies bolster Russian auto market in H2 2013 (Dec. 2013)

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