17 January 2007 — At a press briefing in Moscow yesterday PricewaterhouseCoopers presented its Automotive Market Survey 2006, which shows that last year was a record year for market growth. Several market segments at once showed dramatic rates of increase. Sales of foreign models, for instance, increased by 280,000 units in 2006, which represents a 100% increase on sales in 2005. Sales of new imported cars in Russia stood at 720,000 units, a 76% increase as compared to 2005.

In monetary terms, sales of Russian automobiles in 2006 amounted to $5.8 billion and sales of foreign models amounted to $4.4 billion. Sales of new imported cars totalled $18.2 billion dollars and sales of used imported cars totalled $3.6 billion. Overall sales of automobiles in all categories passed the two million car mark for the first time ever in 2006, with 2,060,000 units sold — 20% more than in 2005.

Stanley Root, head of the PricewaterhouseCoopers automotive practice, reports:

“Already the existing sales volume of two million units per year has brought the Russian market up to the level of the leading European markets, those like Italy, France and Great Britain, for example. In our estimation Russia could become the second largest automobile market in Europe by 2010. Today almost all the largest overseas market players either manufacture their automobiles in Russia or are in the process of building manufacturing plants here.”

According to the results of the survey, new foreign brands have remained the top choice for Russian consumers. From 2002 to 2006, sales of new foreign models in Russia increased from 26% to 71% of the market in terms of value. A growing middle class, an increase in disposable income among the Russian public, the development of car loans policies and car dealership chains are among the many factors spurring the Russian demand for foreign cars.

However, the survey also indicates that the growth achieved in 2006 in the automotive market may stall somewhat in the coming years due to insufficient investment in market infrastructure.

“The Russian automotive segment’s problems are plain to see: inadequate road infrastructure, limited production of auto parts, a primitive used car market and the lack of a system for salvaging auto parts remain the weak links in the automotive chain,” says Stanley Root.

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