PwC: “Russian automobile market will shrink by 8-12% this year”

PwC: “Russian automobile market will shrink by 8-12% this year”

A1Perform – According to PricewaterhouseCoopers’ prediction, the shrinkage rate in Russian automobile market will rise to 8-12% during the second half of the year, from the first six months’ 7%. In other words, the optimistic annual automobile sales figure is being predicted as 2.39 million (-8%), as opposed to the pessimistic scenario of 2.3 million (-12%). PwC analysts point out the slowing down of the growth rate in Russian economy and the depreciation of ruble against other currencies -resulting in increasing automobile prices and more expensive car loans- as the factors behind the decline.

PwC anticipates the sharpest decline to occur in imported automobiles segment, with 15-20%. The decline is expected to be somewhere around 12-16% in domestic brand sales. The slowest decline is predicted in the sales of foreign brand automobiles manufactured in Russia, with 3-5%.

PwC analysts are of the opinion that the Russian market will have a moderate growth rate in the long run. According to the optimistic prediction, the market will repeat the 2012 sales figure of 2.8 million vehicles. The pessimistic scenario is that this figure will be achieved only in 2020. In order for the Russian automobile sales to reach 3.1-3.5 million level, one needs to wait till 2025.

PwC predicts that this year’s Russian automobile production figure will be the same as last year: 1.9 million vehicles. According to the pessimists, the figure will remain unchanged in 2015 as well. The optimists, on the other hand, anticipate a production figure of 2 million vehicles. PWC expects a countrywide production figure between 2.5-2.9 million automobiles for the year 2020.

Finally, PwC has calculated the monetary volume of the Russian market as $31.5 billion for the first half of 2014, which indicates a 3% decline in comparison with the previous year. $2.5 billion of this amount has been generated from the sales of Russian brands (-14%), $16.5 billion from foreign brands manufactured in Russia (+15%) and $12.5 billion from imported automobiles (-11%).