Fast Market Research

Recent Study: Russia Autos Report Q1 2013

New Transportation market report from Business Monitor International: "Russia Autos Report Q1 2013"


Boston, MA -- (SBWIRE) -- 02/23/2013 -- BMI's core scenario for autos sector in Russia envisages a more than three times increase in production, to 2.95mn units by 2017, compared with the level seen in 2009. Continued investments by foreign carmakers and the government's drive to promote local production will stand as major drivers for growth in the production segment. Growth will be broad-based, as it will benefit domestic carmakers and also help develop the solid local supply chain.

A development that has strengthened this view includes Chinese truck maker Dong Feng's plans to start assembly of trucks at the ZIL factory by 2013. The Russian truck maker has been making trucks domestically for almost 90 years, but has reportedly been struggling to meet its debt obligations. Dong Feng is expecting the partnership to help it assemble around 2,000 trucks locally from 2013. Meanwhile, in August 2012, Volkswagen revealed its plans to invest close to EUR1bn in the Russian market by 2018.

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The company has already invested a billion euros so far in Russia, meaning by 2018 it will have invested EUR2bn in a country it considers to be its most strategic market in Europe. In the parts segment, Hyundai's components subsidiary Hyundai Mobis plans to establish large-scale distribution centres in Russia - alongside the US, China and Brazil - in 2013.

We hold similar optimism for vehicle sales segment in Russia. In the first nine months of 2012, new light vehicle sales increased 14% year-on-year (y-o-y), to 2,187,604 units, following a 31% y-o-y and 28% yo- y increase in sales in 2010 and 2011 respectively. Although our bearish view on private consumption growth prompts us to restrict our 2012 sales estimate to only 12% y-o-y, we believe that Russia is well poised to become a key growth market for light vehicles in Europe.

Russia's outperformance in Europe is also one of the key reasons behind the country's stunning performance in BMI's Risk/Reward Ratings for the autos industry in the region. With a total score of 70.2 points, Russia is not only well-above the regional average of 51.9 points, but also leads the ratings table.

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