Is it time to start believing the hype about Russia? That this huge country with a population of over 140 million will, in the coming years, be a larger market for car sales than Germany, Europe’s current engine of growth? Certainly, a year-on-year rise of 72% for car sales in January 2011 is hard to ignore, though it should be noted that in January 2010, the market was in near-collapse.
One of the most eye-catching things about the figures for last month was the size of the Russian new car market compared to registrations totals in certain Western European countries. Italy, where car sales fell by 21% to 164,356 units in January, might have been still way ahead of Russia’s tally of 127,564 but the UK, with 128,811 cars sold, was only 1,247 units higher.
AvtoVAZ, the Russian market’s long-time number one vehicle manufacturer…more than doubled its sales to 35,540 units in January
So much of the reason for the car sales boom in Russia is an ongoing scrappage programme. Under the terms of the scheme, vehicle owners who trade in a car that is 10 or more years old, receive a Ruble 50,000 (US$1,670) certificate to be used as a discount off the price of any Russian-assembled model.
The main beneficiary of the scrappage-fuelled sales bonanza is of course AvtoVAZ, the Russian market’s long-time number one vehicle manufacturer. The company, now 25% owned by Renault, more than doubled its sales (105%) to 35,540 units in January, way ahead of second-placed Kia (8,000), according to data compiled by the Association of European Business in the Russian Federation. The Korean brand saw its numbers up by 63% but that was as nothing compared to Renault, which sold 7,810 cars, a year-on-year rise of 115% thanks to the Logan and Sandero. Chevrolet came in fourth (7,303) courtesy of a surge in registrations of the AvtoVAZ-built Niva, with Nissan rounding out the top five (6,850). The Japanese OEM’s Qashqai was its best selling model, with 2,365 units registered in January.
Volkswagen…rose to become the country’s number eight vehicle maker, Polo sedan sales the main reason.
Worth noting of the manufacturers that did not make the top five list, was the performance of Volkswagen, which now builds a special sedan version of the Polo for Russia in the city of Kaluga. The brand rose to become the country’s number eight vehicle maker, Polo sedan sales the main reason. These reached a record 2,554 units in January.
The Polo in fact managed to overtake the Russian market’s best selling foreign make car of 2010, the Ford Focus. The company recently confirmed that the third generation Focus will enter production at its Vsevolozhsk plant near St Petersburg later in 2011. So as long as the Russian market remains strong, Ford should be well placed to remain a key player.
The Camry sedan, the only model Toyota builds at its St Petersburg factory, failed to make the top 25 best-sellers list in January. The UK-made Corolla (19th place) fared better
Having lost out to Nissan for the title of leading Japanese brand, Toyota‘s Russian division will be hoping that the local appetite for larger cars returns. As it happens, the Camry sedan, the only model Toyota builds at its St Petersburg factory, failed to make the top 25 best-sellers list in January. The UK-made Corolla (19th place) fared better, managing 1,737 sales, one position ahead of the RAV4 (1,479 sales).
Finally, one notable major OEM continues to underperform in Russia, due in part to its lack of manufacturing operations there (imported cars attract sizable duties). Yet Fiat SpA is nothing if not ambitious: while it plans to be building an estimated half a million vehicles annually in partnership with Russia’s Sollers group by 2016, the reality of its vehicle sales in January 2011 was a sobering 778 units. The Russian market might be booming again, but clearly, not for all vehicle manufacturers.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Glenn Brooks is a regular contributor to AutomotiveWorld.com. A former editor and news editor for various specialist automotive titles and newswires, he now specialises in future vehicle programme research as well as OEM, production and product analysis. firstname.lastname@example.org