Russian commercial vehicle manufacturers are on the brink of a crisis

Russian commercial vehicle manufacturers are on the brink of a crisis

Vedomosti – This year, the Russian light commercial vehicle market may shrink down to the “crisis year” levels of 2009.

During the first six months of 2014, the LCV sales have declined by 16% in comparison with the same period of the previous year, with 57,300 vehicles. It’s estimated that the shrinkage rate may reach 31% by the end of the year (111,900 vehicles), an amount very close to 2009 sales figures.

The sales of the biggest LCV manufacturer of the country: GAZ have fallen by 20% during the first six months, with 25,000 vehicles. The vice president of GAZ: Elena Matveyeva, who attended the session of the Russian Parliament: Duma’s Committee of Industry, has warned that labour layoffs may occur, in case the situation gets any worse. As one may remember, AvtoVAZ and Ford Sollers Vsevolozhsk factories had laid off staff this year.

According to Matveyeva; the economic instability, the changes taking place within the Russian transport sector, the shift of the clients in the sector to other types of automobiles and the decline in government purchases, are the factors behind the shrinkage in the market. The director of Avtostat: Sergei Udalov, on the other hand, states that the savings measures taken by the consumers affect the commercial vehicles market, more than any other segment. Udalov predicts that the market will go down by rates in between 20%-30% this year, in different segments. The sharpest decline is expected in the heavy commercial vehicles segment.

Elena Matveyeva lays emphasis on the manufacturers’ need for state subsidies. Accordingly, the primary measure to be taken is the encouragement of the renewal of the vehicle park, more than 70% of which is above 15 years of age. The replacement of transport tax with environmental tax, limiting the usage periods of commercial vehicles and a participation ban for imported vehicles in government purchase tenders are amongst other measures proposed by Matveyeva.

The director of the Russian Ministry of Industry and Commerce Automobile and Special-Purpose Vehicle Production Department: Alexander Morozov has stated that the commercial vehicles have the priority in terms of market support and 3.7 billion rubles have been allocated for this purpose in 2014. This amount will subsidise the purchase of gas-fuelled vehicles.

The car manufacturers also expect support from the Russian government, however the government is reluctant due to lack of resources.