Russia’s promising car sales revival ended in December after only two years, leaving the market 40% below its all-time high reached seven years earlier.
In 2012, Russia’s car market surged 11% to a record 2.94 million units, aided by government programs that coaxed several carmakers to build assembly plants or expand capacity in the country.
Bullish analysts predicted Russia would soon replace Germany as the world’s third-largest national market, after China and the U.S.
Didn’t happen. Car sales in Russia, ever a steady thing, began heading south a year later. By 2016, the market had shriveled to less than half its peak size. Demand had atrophied because of a weak ruble, slumping economy and higher taxes on new cars.
The Russian car market began climbing out of the dumps in 2017. By the end of 2018, volume clawed its way back to 1.80 million units. But it all began to crumble again last spring.
The Moscow-based Assn. of European Businesses, which tracks car sales in Russia, notes that demand rallied last month, elevating year-on-year deliveries in December by 2%. But the trade group is not optimistic about more of the same.
More Gloom Ahead
AEB, citing “similarly challenging” market conditions this year, predicts another 2% sales decline in 2020.
The forecast isn’t particularly surprising. But it does drive a stake through any hopes by Russia’s central planners of mounting a new sales challenge against Germany anytime soon.
Chinese electric-car startup Nio Inc. is forming a manufacturing joint venture with Beijing E-Town International Investment and Development Co., which is investing 10 billion yuan ($1.5 billion) in the business.
According to Sandor Piszar, Chevrolet truck marketing director, “We engineer and build our trucks with customers’ expectations in mind.
Once the playground of exotic car makers, the definition of a niche vehicle has expanded to include image vehicles for mainstream OEMs, and specialist models produced on high-volume platforms.