2013-01-31 09:09:09 - New Transportation research report from Business Monitor International is now available from Fast Market Research
BMI's core scenario for autos sector in Russia envisages a more than three times increase in production, to 2.95mn units by 2017, compared with the level seen in 2009. Continued investments by foreign carmakers and the government's drive to promote local production will stand as major drivers for growth in the production segment. Growth will be broad-based, as it will benefit domestic carmakers and also help develop the solid local supply chain.
A development that has strengthened this view includes Chinese truck maker Dong Feng's plans to start assembly of trucks at the ZIL factory by 2013. The Russian truck maker has been making trucks domestically for almost 90 years, but has reportedly been struggling to meet its debt obligations. Dong
Feng is expecting the partnership to help it assemble around 2,000 trucks locally from 2013. Meanwhile, in August 2012, Volkswagen revealed its plans to invest close to EUR1bn in the Russian market by 2018.
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The company has already invested a billion euros so far in Russia, meaning by 2018 it will have invested EUR2bn in a country it considers to be its most strategic market in Europe. In the parts segment, Hyundai's components subsidiary Hyundai Mobis plans to establish large-scale distribution centres in Russia - alongside the US, China and Brazil - in 2013.
We hold similar optimism for vehicle sales segment in Russia. In the first nine months of 2012, new light vehicle sales increased 14% year-on-year (y-o-y), to 2,187,604 units, following a 31% y-o-y and 28% yo- y increase in sales in 2010 and 2011 respectively. Although our bearish view on private consumption growth prompts us to restrict our 2012 sales estimate to only 12% y-o-y, we believe that Russia is well poised to become a key growth market for light vehicles in Europe.
Russia's outperformance in Europe is also one of the key reasons behind the country's stunning performance in BMI's Risk/Reward Ratings for the autos industry in the region. With a total score of 70.2 points, Russia is not only well-above the regional average of 51.9 points, but also leads the ratings table.
On a macro level, however, we highlight that Russia's business environment is hampered by poor infrastructure, rising state protectionism in the energy industry and weak institutional development, which have contributed to an endemic corruption problem and limited impartial judicial oversight. There are signals that the government is taking some of these issues seriously, but we do not expect any major changes to occur within the short term. This puts Russia at the risk of losing out to its regional majors such as Germany and the UK in our ratings system.
Report Table of Contents:
- Russia Autos Industry SWOT
- Russia Political SWOT Analysis
- Russia Economic SWOT Analysis
- Russia Business Environment SWOT Analysis
- UK Boosts Europe, But Favourites Still Outperform
- Table: Passenger Car Sales 8M12
- Incentive Boom For Japan, US Powers On
Industry Risk/Reward Ratings
- Poor Show From Western Europe Hurts Region's Score In BMI Ratings
- Table: BMI Industry Risk/Reward Ratings For Autos In Europe
- Table: Russia - Economic Activity, 2011-2016
Industry Forecast Scenario
- Domestic Sales
- Table: Russia Autos Sales, 2010-2017
- Table: Russia Autos Production, 2010-2017
- Table: Russia Autos Trade, 2010-2017
- WTO Membership: Beginning Of A New Age?
- Kaliningrad: The New Autos Hub
- Table: Major And Developing Automotive Clusters In Russia
Passenger Cars - Forecast & Analysis
- Table: Russia Passenger Car Segment, 2010-2017
- Company Developments
Commercial Vehicles - Forecast & Analysis
- Table: Russia Commercial Vehicle Segment: Historical data and Forecast, 2010-2017
- Company News
- Taganrog Automobile Plant
- Ford Motor
- General Motors Company (GM)
- Table: Russia's Population By Age Group, 1990-2020 ('000)
- Table: Russia's Population By Age Group, 1990-2020 (% of total)
- Table: Russia's Key Population Ratios, 1990-2020
- Table: Russia's Rural And Urban Population, 1990-2020
- How We Generate Our Industry Forecasts
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