Any doubts that the Moscow International Automobile Salon (MIAS) is now a top-tier global car exhibition will be dispelled by the event currently taking place at the Crocus Expo Centre.
With 100,000sq-m of floor space, it is twice the size of the 2010 show, staged in the aftermath of the global banking collapse. More than 100 companies are exhibiting and there are 24 global debuts, split roughly 50:50 between luxury cars and more affordable models.
Jaguar chose Moscow to launch its four-wheel drive XF and XJ – even though three-quarters of production is expected to go to the US – while Bentley unveiled its fastest-ever road car, the 205mph (330kph) Continental GT Speed.
The show organisers expect a million visitors in the ten days it is open to the public, making Moscow a bigger attraction than the motor shows of Geneva, Paris, Frankfurt, Detroit or Tokyo.
In the medium term, Russia is expected to become the major European market for super-luxury cars, despite a prohibitive and complex taxation structure
Russia is now Europe’s second-largest new car market, and is staging a dramatic recovery after sales halved virtually overnight following the financial crisis of 2009-10.
Registrations rose by 40% between 2010 and 2011, and were up a further 15% in the first half of this year. Forecasters believe the 2012 total could be as high as 2.9 million, which will take it back to 2008 levels. With a light vehicle density of only 250 cars per 1,000 people – less than Poland, the Czech Republic and South Korea – there is plenty of scope for further growth.
In the medium term, Russia is expected to become the major European market for super-luxury cars, despite a prohibitive and complex taxation structure which means, for example, that the four-wheel-drive Jaguar XJ will cost the equivalent of £196,000 (almost US$290,000).
Russia’s accession to the World Trade Organization just a week before the show resulted in an immediate cut in import duties from 30% to 25%, and these are set to fall progressively to 15% by 2018. The government responded by imposing a scrappage tax – to be levied only on imports – which more or less maintains the status quo as far as prices are concerned.
This was done supposedly in the name of protecting those OEMs, numbering around a dozen, which have set up production facilities in Russia. Locally-produced foreign cars account for 45% of the Russian market, while native Russian cars muster can only 10%.
Russia’s accession to the World Trade Organization just a week before the show resulted in an immediate cut in import duties from 30% to 25%, and these are set to fall progressively to 15% by 2018
Earlier this year, Volkswagen‘s Kaluga plant, to the south of Moscow, surpassed the Renault–Nissan AvtoVAZ factory for production. VW and General Motors, which launched a saloon version of the Astra at the show, are both planning major new investments in their Russian facilities.
Lada is the uncontested market leader, and it revealed the new Kalina B-segment car and an electric version of it called the ElLada at the show. But the brand is coming under increasing pressure from the aggressive Korean OEMs and has seen its share dip below 20%. What’s more, it is increasingly reliant on old Renault technology for its new models.
Kia is number two in the market, while the Hyundai Solaris, a locally-produced version of the Accent, has regularly been the second-favourite individual model behind the Kalina.
Moscow has now become another staging post in the global automotive industry merry-go-round – as reflected in the westernised character of the MIAS – but perhaps that’s fitting, given Russia’s new status as a member of the WTO.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Roger Stansfield is a freelance automotive industry journalist based in London. He covers all aspects of the automotive industry, with a particular focus on future technology.
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