Russia Autos

With a population of 142mn and a car ownership rate of 167 vehicles per 1,000 people, Russia offers substantial automotive sales growth potential. BMI's newly released Russia Automotives Report estimates that Russian car sales totalled US$9bn in the first half of 2006, nearing the US$12.4bn achieved in the whole of 2005. Foreign brands are likely to be the chief winners in the battle to win Russian hearts and minds, with BMI projecting they will capture around 70% of the market by 2010 up from around 40% in 2005. In contrast to foreign brands, Russian producers have seen more moderate sales growth. AvtoVAZ sales rose by just 3.0% while the troubled GM-AvtoVAZ joint venture fell by 19.6%. In the light of intensive foreign investment activity over the first half of 2006, BMI forecasts passenger car output of 1.13mn units in 2006, an increase of 7.6% y-o-y, due to increased capacity and better-than-expected results by Russian carmakers. Output growth will be strong in the HCV (heavy commercial vehicle) segment and modest in the bus segment, with growth at 27.6% and 5.6% respectively in 2006-10, according to BMI forecasts.

BMI projects sales of foreign-branded cars manufactured in Russia are set to rise by 14% in 2006, given an expansion in production capacity and increased local demand. Rising income in middle-class households has led to increasing demand for better quality cars, a trend that has put Russian-owned producers at a disadvantage compared to foreign car manufacturers. Russian autos firms are, therefore, looking to form commercial deals - joint ventures and producing vehicles under licence - to modernise car production. However, autos majors are increasingly looking to setting up fully owned subsidiaries in Russia, lured by a mixture of tariff reductions on imported parts and machinery and booming demand for foreign-branded cars. The rush to invest comes ahead of Russia's entry to the World Trade Organisation (WTO), which will prevent the government from offering incentives such as the waiving of tariffs. In Q206 alone, Japan's Nissan and Germany's Volkswagen (VW) announced plans to build new automobile plants in Russia, with total investment of up to US$600mn between them. Other foreign investors include General Motors (GM), Toyota, Peugeot, VW, Renault, Isuzu, Kia and Ford with their operations mostly centred on Russia's largest European cities, Moscow and St Petersburg. All autos majors investing in Russia have witnessed a sizeable increase in demand for their vehicles.

The pressure is on Russian producers to reclaim the sales they have lost to foreign brands. Russia's largest manufacturer AvtoVAZ has witnessed a revival in sales since it was taken over by state-owned arms dealer Rosoboronexport in December 2005 and guaranteed US$5bn in state aid for an expanded range of models and increased production targets. AvtoVAZ is seeking expansion through acquisitions. The carmaker's strategy, including its planned launch of budget models in the EU, carries high risks but represents its best hope for revival. In the commercial vehicles segment, KAMAZ (Kamskiy Avtomobilny Zavod and GAZ (Gorkovsky Avtomobilny Zavod) are buoyed by rising sales and are seeking to expand production abroad.

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• Chapter 1 - SWOT Analysis
  • Russia Auto Industry SWOT
  • Russia Economic SWOT
• Chapter 2 - Europe Regional Market Overview
  • Production
  • Table: European Autos Production - Historical Data & Forecasts (CBUs unless otherwise stated)
  • Table: European Autos Production by Group, H1 2006
  • Table: Central and Eastern European Car Assembly Plants, 2006 (Countries under review)
  • Table: The Rise in Central and Eastern European Production and Average Wages
  • Sales
  • Table: Europe Autos Sales - Historical Data & Forecasts (CBUs unless otherwise stated)
  • Table: EU and EFTA Autos Sales by Group, H1 2006
  • Table: New Vehicle Registrations by Market in Europe (EU and EFTA), 2006
  • Table: New Car Registrations by Market in Europe (EU and EFTA), 2005
  • Competitive Landscape
  • Table: EU-15 and EFTA, Car Registrations, 2005
  • Table: Top 10 Best Selling Models in Europe, Jan-May 2006
  • Suppliers
  • Table: Top Five OEM Parts Suppliers, 2005
  • Regulation
  • European Car Prices
  • Table: Price of Europe's five top-selling models by market
• Chapter 3 - Business Environment Rankings
  • Table: Central and Eastern Europe Business Environment Ranking
  • Economics - Long-term Risk
  • Politics - Long-term Risk
  • CBU Output Growth
  • Vehicle Ownership/Penetration Potential
  • Regulation
  • Competitive Environment
• Chapter 4 - Industry Forecast Scenario
  • Production and Sales
  • Table: Russia Auto Industry Forecast (CBUs unless otherwise stated)
  • Trade
  • Table: Russia Autos Sector - Historical Data & Forecasts (CBUs, unless otherwise stated)
  • Economic Contribution
  • Table: Russia Auto Industry Forecast (CBUs unless otherwise stated)
• Chapter 5 - Macroeconomic Forecast Scenario
  • Table: Growth And Output
  • Country Snapshot: Russia Demographic Data
  • Section 1: Population:
  • Table: Demographic Indicators (2005)
  • Table: Rural/Urban Breakdown
  • Section 2: Education & Healthcare
  • Table: Education
  • Table: Healthcare: Vital Statistics
  • Table: Healthcare: Expenditure
  • Section 3: Labour Market And Spending Power
  • Table: Employment Indicators
  • Table: Consumption and Stratification
• Chapter 6 - Special Focus: Commercial Vehicles
  • Regional Market Overview
  • Table: Regional Commercial Vehicle Market: Country ranking, sales
  • Table: Regional Commercial Vehicle Market: Country ranking
  • Table: Regional Commercial Vehicle Market: Country ranking, production
  • Table: Regional Commercial Vehicle Market: Company ranking of significant regional manufacturers
  • Table: Recent and planned investments in Central and Eastern Europe
  • Russia Commercial Vehicle Market Overview
  • Table: Structure of the Commercial Vehicle Market (CBUs mn)
  • Sales
  • Table: Size of Commercial Vehicle Market
  • Table: New truck imports by brand
  • Table: Size of Commercial Vehicle Market
  • Production
  • Table: Production in Russia
  • Table: Production forecasts for Russia
• Chapter 7 - Competitive Landscape
  • Table: Foreign brand sales in Russia
  • Regulation
  • Manufacturers - Foreign Brands
  • Table: Current and planned investment by foreign automakers in Russia
  • Manufacturers - Russian Brands
  • Table: Passenger Car Production (CBUs)
  • Table: Passenger Car Production (CBUs)
  • Suppliers
• Chapter 8 - Company Monitor
  • Regional Case Study: Kia
  • Sales
  • Table: Kia Sales in Europe (EU and EFTA), By Model
  • Production
  • Table: Kia Production In Europe (EU, EFTA, Romania and Turkey), By Model
  • Company Profiles
  • AvtoVAZ
  • KAMAZ
  • RusPromAvto
  • Kia
  • Renault
  • Taganrog Automobile Plant,(TagAZ)
  • BMI Forecast Modelling.90
  • Automobile Industry
  • Sources
  • Appendix: Regional Demographic Data
  • Wages (ave. labour force per annum), US$ PPP
  • Population
  • Household Spending Per Capita, US$
  • Private Consumption Per Capita, US$ PPP
  • Market Size, GDP, US$bn .