By on June 10, 2013

Russia - Picture courtesy 123rf.com

Russia is one of the BRIC countries, the folks that are supposed to power the world to new prosperity. Too bad Russia is running out of steam. Russian car sales dropped 12 percent in May, the Association of European Businesses (AEB) told Reuters.

From January to May, light vehicle sales were down 4 percent in Russia, says the AEB. In April, sales were down 8 percent. It looks like Russia is coming down with the European contagion.

Thinking that the slump will continue, the AEB cut its forecast for 2013 to 2.8 million, down from 2.94 million in 2012. Russia had its eyes set on displacing Germany as Europe’s largest car market this year. At the current rate, it might have to be postponed until next year.

Largest automaker in Russia is the Autovaz-Renault-Nissan Group with a 30.6 percent market share, followed by the Volkswagen Group with a 10.9 share. The GM group is third with a 9.1 percent share.

Full data can be downloaded here. And what about the rest of the BRICs?

In Brazil, new registrations in the first five months of the year are 8 percent ahead of the same period in 2012.

In India, “May is the 6th month in a row of year-on-year decline for the Indian car market at -8% to 193,338 registrations, which brings the year-to-date total to 1,081,177 units, down 11% on 2012,” writes our resident global car counter Matt Gasnier.

In China, total vehicle sales rose 12.6 percent to 9 million in the first five months. In May, total vehicle sales were up 9.8 percent to 1.8 million units.

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8 Comments on “Russia Disappoints...”


  • avatar
    Big Al from Oz

    What else can you expect. Corrupt and inefficient by our standards.

    The Russians are heavily reliant on Europe for cash as well.

    I read an interesting article where Russia was looking to diversify into China more. But have the Chinese ever trusted the Russians?

  • avatar
    skor

    Average pay in Russia is something like 1/3 what it is Western Europe, but fuel prices in Russian, although lower than Western Europe, are quite high considering local wages, even though the Russians are producing the stuff.

    The Russian government is deliberately discouraging an American style suburban, car-based lifestyle. The Russians need to sell their oil/gas overseas to generate badly needed foreign currency. They still have a long way to go to catch up with the West.

    • 0 avatar

      I don’t know what “The Russian Government” might be discouraging, but the very same government decided to increase the area of the capital by a factor of two, in a plan commonly known “The Rubber Moscow”. One of named reasons is an attempt to push the population out into suburbs and reduce the city’s density.

  • avatar
    Jacob

    Not entirely unexpected. We might see more of news like this in future. Macroeconomists predict a growth slump. The fiscal outlook is getting worse as the popular and corrupt government spends more and more money on social programs.

  • avatar
    NMGOM

    Let’s face it: 70 years of Communism can’t be overcome in two decades.

    There is a certain mentality and philosophy about organizational thinking, business practices, and integrity that would have to change 180 degrees for Russia to create a Western-style economy. And that may take (according to one of my Russian friends) just as much time to “dig out” of this “hole” as it did to get into it in the first place. We’re looking at 50-60 years here.

    Ultimately, good business practices, innovations, and quality depend upon a sense of fair play and some level of trust in honoring commitments. It may even depend on optimism about the future, a willingness to take risks, and a desire to be generous with success. Keeping your head down won’t do it.

    I am afraid that these types of things are new to Russians, and it may have to be learned over a generation or two. But we must remember that Russia has had a paranoia about its neighbors, and has suffered from isolationist thinking. I can’t blame them for being a little withdrawn, considering the effects of two world wars and historic invasions. Again, that, too, is going to have to change, in order for them to develop an international economy with credible international products.

    ——————-

  • avatar
    skor

    God Americans sound like compete tards. “Any country not Murica, that’s not tryin’ to imitate Murica is backward, corrupt, stupid, anti-democracy, hates Jebus……” Never does it occur to the obese, gun fetishist, hypocrites (how you like that stereotyping?) that not everyone outside Murica wants to be like Murica? I’ve seen it myself, having actually been outside of Murica to parts of the world that ain’t Murica. Hard to believe, but it’s true.

    • 0 avatar

      Russia still offers a rich sample of brainless Soviet revaunchists, fixated on America and finding new anti-American slurs, but as far as understanding the basic human right of self-defence, Russians overall are fairly well educated, and the gun ownership discourse is quite robust there. The retrogrades may continue to throw their “gun fetishist” moniker, but they are powerless to smear their opponents and derail the progress. Swearing is the only argument they have left.

  • avatar
    jimbob457

    Putin & company bet heavily on Russia’s comparative advantage as a raw materials producer. Good choice in its day, but nothing lasts forever. Now oil & gas prices are about to crater. The Chinese are scouring everywhere for raw materials and Africa seems to be paying off for them. Who needs Siberia? Maybe, perhaps, Mongolia if the Aussies do the work.

    Russkis were a very formidable enemy to the USA back in the old cold war days. They were also an amazing ally in WWII. No doubt they will sooner rather than later make the necessary adjustments to any new economic realities, but car sales may take a hiccup in the mean time. Plus, their road system has to catch up, and their market for cars may well be temporarily saturated.

    Watch the price of Brent crude oil to get a handle on the outlook for Russian car sales in the near term.


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