Boston, MA -- (SBWire) -- 11/06/2014 --This quarter, BMI has revised down its forecasts for the Russian auto sector. We now anticipate a 9% drop in the passenger car segment, from a 5% decline previously, and a 9.4% decline in light commercial vehicle (LCV) sales, from 5.4% previously. Accordingly, we expect total light vehicle sales to decline 9.0% in 2014.
Our decision to revise down our forecasts comes against a backdrop of a worsening domestic political and economic situation. On the political side, the ongoing crisis in Ukraine has hit consumer confidence and led to the imposition of economic sanctions by Western nations. This in turn has fed into what was already a fairly bleak economic outlook, with ongoing weakness in private consumption of particular concern to the autos sector.
Over H114, light vehicle sales declined by 7.6% year-on-year (y-o-y), to 1,229,839 units. Looking at July 2014 monthly sales data, Russia saw a 23% annual decline in new vehicle sales, to just 180,767 units, according to data released by the Association of European Businesses (AEB). Leading Russian car manufacturer AvtoVAZ registered a 25% decrease in sales of its Lada cars, to 28,014 vehicles, over the month.
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Looking forward, BMI expects to see further erosion in private consumption throughout 2014 as inflation remains elevated, the currency weakens further, unemployment creeps upward, real wages dip, and access to credit slows. These dynamics have weighed on sales over the year to date, as consumers remain reticent over big-ticket purchases such as new cars. Moreover, we expect to see a more pronounced deceleration in private sector spending in the second half of the year, as capital outflows and political uncertainty weigh on fixed investment while elevated inflation erodes consumer purchasing power. These dynamics have informed our bearish light vehicle sales forecast revision for the year. Beyond the current year, BMI remains downbeat, targeting further falls in new vehicle sales over 2015, before...
The Russia Autos Report features the latest data and forecasts covering production, sales, imports and exports.
Business Monitor International (BMI)'s Russia Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in Russia.
Key Benefits
- Benchmark BMI's independent automotives industry forecasts on Russia to test other views - a key input for successful budgetary and planning in the Russian automotives market.
- Target business opportunities and risks in the Russian automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Russia.
- Assess the activities and market position of your competitors, partners and clients via our Competitive Landscape Analysis.
Coverage
BMI Industry View
Summary of BMI's key industry forecasts and views, covering production, sales and the introduction of new technology or products.
Global, Regional and Country Industry Overviews
In-depth analysis of the major global and regional developments in the market, which can be linked with the country industry overview, providing cross-country investment, product and financing trends that will affect each market, supported by BMI?s global and regional industry forecasts.
Business Environment Rankings
BMI's proprietary Autos Business Environment Rankings are a unique country-comparative Risk-Reward Rankings index that separately analyses the risks and rewards of operating in each market. It is aimed at investors (including manufacturers, suppliers and dealers) who seek to either identify and compare market opportunities, or evaluate country-specific operational challenges.
The rankings methodology makes sophisticated use of over 40 industries, economic and demographic data points.
BMI Industry Forecasts
Historic data series and forecasts to end-2018 for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:
Total production value (US$bn); total production of units; production by vehicle-type (including cars, commercial vehicles, trucks and buses); total sales value (US$bn); sales by vehicle-type, including passenger cars and commercial vehicles (vans and microbuses, pickups, trucks and buses, 4 wheel drive); total exports by value (US$bn) and by units; total imports by value (US$bn) and by units; contribution to GDP; employment in industry.
BMI Economic Forecasts
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