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Vehicle sales in Russia have been on the rebound thanks to ongoing government support in the form of the scrappage programme. Car sales in June rose 45% year-over-year (y-o-y). Total vehicle sales reached 174,838 units during the month, according to the Association of European Businesses. The big jump marked yet another consecutive month of solid sales growth. In May, Russian car sales climbed 31% y-oy, although sales decline marginally compared with April.
Sales have been recovering since April on the back of the vehicle junk scheme launched in March 2009. That programme gives buyers RUB50,000 if they trade in a car over 10 years old. The government launched the scheme with the aim that it would result in 200,000 new car sales this year. It launched the second phase of the scheme at the end of June 2010, pledging an additional RUB10.5bn (US$340mn) to the programme. Consequently, BMI expects the bounce in sales to continue, with total sales nearing 1.6mn units this year.
Domestic carmakers have benefited from the car scrappage scheme, which applies only to purchases of Russian-produced vehicles. In April, nine of the top 10 selling brands in Russia were locally produced. The biggest winner so far has been AvtoVAZ, which makes the Lada. AvtoVAZ’s April sales reportedly surged 54% y-o-y, to 34,136 units. So far this year, domestic brands appear to be gaining on their foreign rivals. Based on sales in the first four months, GAZ and UAZ have returned to growth, while General Motors Company (GM), VW and Hyundai Motor were still posting declines. Any gains recorded by Russian brands should be viewed positively, especially when considering that total sales in the January to April 2010 period were down 13% from the 456,179 units sold in the same period in 2009. The srappage scheme has also provided a boost to auto output. In the first five months of 2010, vehicle production rose 65% over the same period a year ago to 381,560 units, Reuters reported, citing figures from industry body ASM Holding. However, better availability of auto financing has also played a factor. At the same time, we are cognizant of the fact that after the disastrous year that was 2009, output really has nowhere to go but up.
Overall, sales will be tied to economic conditions. In this regard, there have been some positive developments recently. The availability of credit has been improving. ZAO Toyota Bank expects that by the end of the year, nearly half of all purchases will be financed with loans. If these estimates pan out, then the auto loan market is set to expand 19% y-o-y in 2010. On the negative side, though, are the fundamentals weaknesses of Russia’s economy, which include low productivity, corruption and weak infrastructure. A demographic decline may also worry car dealers in the long term, as the population ages.
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Browse All Business Monitor International Market Research Reports
Vehicle sales in Russia have been on the rebound thanks to ongoing government support in the form of the scrappage programme. Car sales in June rose 45% year-over-year (y-o-y). Total vehicle sales reached 174,838 units during the month, according to the Association of European Businesses. The big jump marked yet another consecutive month of solid sales growth. In May, Russian car sales climbed 31% y-oy, although sales decline marginally compared with April.
Sales have been recovering since April on the back of the vehicle junk scheme launched in March 2009. That programme gives buyers RUB50,000 if they trade in a car over 10 years old. The government launched the scheme with the aim that it would result in 200,000 new car sales this year. It launched the second phase of the scheme at the end of June 2010, pledging an additional RUB10.5bn (US$340mn) to the programme. Consequently, BMI expects the bounce in sales to continue, with total sales nearing 1.6mn units this year.
Domestic carmakers have benefited from the car scrappage scheme, which applies only to purchases of Russian-produced vehicles. In April, nine of the top 10 selling brands in Russia were locally produced. The biggest winner so far has been AvtoVAZ, which makes the Lada. AvtoVAZ’s April sales reportedly surged 54% y-o-y, to 34,136 units. So far this year, domestic brands appear to be gaining on their foreign rivals. Based on sales in the first four months, GAZ and UAZ have returned to growth, while General Motors Company (GM), VW and Hyundai Motor were still posting declines. Any gains recorded by Russian brands should be viewed positively, especially when considering that total sales in the January to April 2010 period were down 13% from the 456,179 units sold in the same period in 2009. The srappage scheme has also provided a boost to auto output. In the first five months of 2010, vehicle production rose 65% over the same period a year ago to 381,560 units, Reuters reported, citing figures from industry body ASM Holding. However, better availability of auto financing has also played a factor. At the same time, we are cognizant of the fact that after the disastrous year that was 2009, output really has nowhere to go but up.
Overall, sales will be tied to economic conditions. In this regard, there have been some positive developments recently. The availability of credit has been improving. ZAO Toyota Bank expects that by the end of the year, nearly half of all purchases will be financed with loans. If these estimates pan out, then the auto loan market is set to expand 19% y-o-y in 2010. On the negative side, though, are the fundamentals weaknesses of Russia’s economy, which include low productivity, corruption and weak infrastructure. A demographic decline may also worry car dealers in the long term, as the population ages.
About Us
ReportsandReports comprises an online library of 10,000 reports, in-depth market research studies of over 5000 micro markets, and 25 industry specific websites. Our client list boasts almost all well-known publishers of such reports across the globe. We as a third-party reseller of market research reports employ a number of marketing tools, such as press releases, email-marketing and effective search-engine optimization techniques to drive revenues for our clients. We also provide 24/7 online and offline support service to our customers.
(Due to the length of these URLs, it may be necessary to copy and paste the hyperlinks into your Internet browser's URL address field. Remove the space if one exists.)
Contact:
Ms. Sunita
7557 Rambler road,
Suite 727, Dallas, TX 75231
Tel: +1-888-989-8004
http://reportsandreports.blogspot.com/
http://reportsandreports.proarticles.co.uk/
http://reportsnreports.wordpress.com/
