There was a time when the automobile market in Russia was enjoyed by the affluent community; cars were a luxury and those lucky enough to afford them generally had the open roads to themselves.
According to a study released by PricewaterhouseCoopers (PwC), Russia is now home to the largest car market in Europe overthrowing Germany for the title. The report revealed that over 1.645 million new cars were registered in Russia during the first half of 2008, compared with 1.63 million cars in Germany.
Analysts claim the surge beats all forecasts. Growth has actually accelerated since 2007, when car sales were up 35 percent. And, the market won’t be slowing down anytime soon, they said. PwC reports the Russian auto market is enjoying “an astonishing growth.” In fact, manufacturers are planning for an even hotter market in the next several years.
PwC’s report predicts new sales will keep rising, reaching six million units by 2014, more than double what they were last year.
Experts credit the statistics with cheap credit and oil-fueled economic growth. Russian roads are jammed with all kinds of vehicles; most of them are Western or Asian design and range from tiny compacts to oversized SUVs. And, there’s room for everyone on the road from Renault to Mitsubishis to Jeeps and even to high-end Mercedes and BMWs.
Sales of cars jumped 41 percent in the first half of 2008 compared to the same period of time the year before. Perhaps nothing symbolizes the Russian consumer boom of recent years more than the phenomenal growth for cars. PwC added that sales of foreign brands have increased even more quickly, by 47 percent, according to figures published last week by the Association of European Businesses (AEB) in Moscow.
PwC predicts that for 2008 as a whole, the total Russian market will reach between 3.6 million and 3.8 million cars. That compares with just 1.5 million five years ago. Over the same five-year period, the share of foreign models has risen from 38, to 59 percent of new car sales. Helped by the growing popularity of pricier foreign brands, the Russian car market is growing even more rapidly in dollar terms, up 64 percent, to a projected $33.8 billion this year. In comparison, car sales in Western Europe are growing at less than 5 percent annually.