New Report Available: Russia Autos Report Q1 2015

Despite the launching of a new car scrappage scheme over Q314, which has started to slow the rate of falling new vehicle sales year-on-year , BMI maintains its bearish view of Russian auto sales for 2014 and 2015 .

We believe that the scrappage scheme will yield unimpressive results owing to our downbeat private consumption outlook over 2014/2015. Private consumption will remain subdued at 2.8% in 2014 and 3.0% in 2015; far below the 5.5% and 6.3% growth seen in 2010 and 2011. In contrast to the accelerating growth in private sector lending from May 2010 to the end of 2011, credit growth has been slowing since H212 and is set to continue along this trend. As EU sanctions force Russian banks to tighten lending, growth in loans to businesses and private households will fall further, dampening consumer demand for big-ticket items including cars. Furthermore, we expect real wages to decline over the coming quarters owing to the depreciation of the rouble adding to import prices and the government's continued fiscal consolidation agenda which involves the reduction of pensions and public sector wages.

Full Report Details at
- http://www.fastmr.com/prod/912409_russia_autos_report_q1_2015.aspx?afid=301

Secondly, the recent scrappage announcement offers fewer incentives than previously. Whereas the previous scrappage scheme was accompanied by a programme of subsidised credit provision for car buyers, the government's recent proposal is solely focused on scrappage. Given the worsening credit conditions over 2014 and 2015, subsidising the final price of the car will become less important to consumers than affordable loans. On top of this, the RUB40,000 discount in price offered by the new scheme is 20% less than the RUB50,000 offered in 2010/2011 rendering it less attractive than before. Thus, we believe this smaller reduction in the price tags of cars will not be enough to woo consumers worried about paying back higher interest car loans with their falling real wages.

That said, the most recent sales data (for October 2014) show that the scrappage...

The Russia Autos Report features the latest data and forecasts covering production, sales, imports and exports.

Business Monitor International (BMI)'s Russia Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in Russia.

Key Benefits

* Benchmark BMI's independent automotives industry forecasts on Russia to test other views - a key input for successful budgetary and planning in the Russian automotives market.
* Target business opportunities and risks in the Russian automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Russia.
* Assess the activities and market position of your competitors, partners and clients via our Competitive Landscape Analysis.



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