PwC expects 1.1 – 1.2 million new vehicle sales in Russia in 2016

PwC expects 1.1 – 1.2 million new vehicle sales in Russia in 2016

Vedomosti – PricewatershouseCoopers (PwC) predicts a decline in the Russian automotive market in 2016, to 1.1 million vehicles in the baseline scenario or to 1.2 million, more optimistically (based on car registration data). The prediction is equivalent to 14% or 10% year-on-year decline, respectively.

The sharpest decline will be observed in the sales of new imported cars, by 20% in the baseline scenario, to 250,000 vehicles. The production of foreign brand vehicles will go down by 14% to 610,000 and the Russian brands by 7%, to 240,000.

PwC’s previous sales forecast for 2016, in November, was a repeat of the 2015 performance: 1.3 million units in the baseline and 1.4 in the optimistic scenario. Due to the deterioration of the macroeconomic situation in Russia at the end of the year, the PwC analysts have revised their predictions. According to the current prediction of PwC, the oil price will be $40 per barrel in the baseline scenario or $43 in the optimistic case.

In the beginning of 2015, PwC had predicted that the market would not recover to its 2012 levels before 2019 at best, revising the forecast towards the end of the year, postponing the recovery to 2022.

The new prediction confirms this trend, however, the growth rate will be faster, due to the steepness of the shrinkage in 2016, as stated during the presentation of PwC.

According to AEB data, Russian car and light commercial vehicle market amounted to 1.6 million vehicles in 2015, declining by 35.7%. The market will shrink further in 2016, by another 4.7% to 1.53 million vehicles, as stated by AEB previously.