Russian Car Market Off To The Races. Again

Bertel Schmitt
by Bertel Schmitt

The fate of the car industry depends highly on the price of oil. Higher oil prices, lower car sales. Lower oil prices, higher cars sales. Everywhere but Russia.

Russia’s main export is energy. Oil and gas. When oil climbed, the Russians were rolling in money and bought cars like crazy. Then came 2008. Oil crashed. The market crashed. Russian oligarchs went bankrupt. The car market followed. Unit sales of passenger cars dropped 50 percent last year. The annual Moscow Motor Show was cancelled. Automakers were worried about their investments into the Russian market. The Russians tried to protect their industry, raised import tariffs. The market plummeted more. Now, all of this is ancient history.

The market and the auto show are back. Last Wednesday, the Moscow Motor Show opened its doors, and exhibitors are writing orders, . In July, Russians bought 48 percent more cars than in June. Automakers have regained confidence in Russia.

According to The Nikkei [sub], the Russian car market has a much greater growth potential than the U.S. and Europe. “Only 230 vehicles are owned by every 1,000 Russians, compared with some 700 in Europe and 900 in the U.S.” (The Nikkei numbers are a bit high.)

Japanese carmakers are coming back into the Russian market.

“You’ve got to fish where there are fish,” Mitsubishi Motors President Osamu Masuko said.

Demand is high for large four-wheel drive cars in Russia, where SUVs account for 20 percent of total car demand.

Luxury is also back from the dead. Bentley plans to market its “Mulsanne” model, priced from 450,000 euros (571,140 dollars), in the country. Despite the high sticker price, Bentley has already received so many preorders that customers now placing orders must wait for delivery until after early next year.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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 2 comments
  • Robert.Walter Robert.Walter on Aug 30, 2010

    Caption to pic: "Vladi, du alte schweinehoon du!" (After all the hunting, fishing, karate, shooting, plane-flying photo-ops it could only be our favourite muscle flexin' "Commanduer in Beef" behind the wheel of the hooning F1 car!)

  • Avtopromenade Avtopromenade on Aug 30, 2010

    paragraph 2 is a master class... in how to put about 100 hackneyed cliches into a couple sentences. Fail.

  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
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