PwC: “Russian automotive market will start to recover in 2017”

PwC: “Russian automotive market will start to recover in 2017”

RusAutoNews.Com – The Russian automotive market will start to recover from 2017 onwards and reach a volume of 2.1 million new passenger cars by 2020, as predicted by PwC.

“As is known, the historical dynamics of new car sales has a cyclical nature in Russia (with a frequency of 5-7 years), in parallel with the cycles in the economy in many ways. The long-term forecast of PwC is based on the averaging of future cyclical sales fluctuations. Therefore, in order to answer the question: “when will the new passenger car sales figures return to the pre-crisis levels?”, one should consider the pre-crisis levels as an average sales volume calculated during one cycle. For example, the average sales figure of 2.1 million units recorded during the 2009-2015 period, corresponds to the current forecast of PwC for the year 2020” – comments the partner and the head of the department of advisory services to companies in the automotive industry of PwC in Russia: Oleg Malyshev.

Malyshev has added that in the event of the continuation of adverse economic conditions in the future, a demand shift from new to secondhand vehicles will most likely be observed in the automobile market. This trend is partly reflected in the results of 2015. The sales of new cars in Russia (registered) has decreased by 45% year-on-year in 2015, in comparison with the 19% shrinkage in secondhand car sales. Thereby, the secondhand market has overtaken the volume of the new automobile market in monetary terms in 2015.

“Despite the dire situation not only the automobile market, but also the general economy is in, the crisis has a temporary nature, as largely confirmed by the historical cyclical dynamics of the automotive market. Most of the car manufacturers, who invested in the localisation of production in Russia, believe in the fundamental potential of the Russian market and are prepared to incur losses for a certain period of time, in the expectation of growth in sales and profits, along with the market recovery” – summarises Oleg Malyshev.