Ghosn: One-Third Of Russia's Auto Market Will Vanish Under Recession
Renault-Nissan CEO Carlos Ghosn warned Monday that Russia’s auto market will lose a third of itself under the nation’s recession.
Automotive News Europe reports Ghosn spoke with Bloomberg about the issue after the unveiling of the Renault Kadjar in Paris, stating the market was well on its way to losing a fifth of itself this year, adding up to “one-third of the Russian market disappearing in a couple of years.” He added that while there might be a light at the end of the tunnel, whether that light is an opening or an oncoming train remains uncertain.
The overall market witnessed a sales decline of 10 percent in 2014, with around 2.5 million units sold. According to the Moscow-based Association of European Businesses, the forecast calls for a 24 percent decline in 2015.
Meanwhile, Renault-Nissan and partner AvtoVAZ saw sales of their offerings drop 7 percent in 2014 to 764,245 units. Market share did increase to 30.7 percent in the same period, up from 29.6 percent in 2013. The Franco-Japanese automaker indirectly owns 50.01 percent of the Russian manufacturer, with the aim of gaining 40 percent of the Russian market by 2016.
Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.
More by Cameron Aubernon
Comments
Join the conversation
Ghosn was believing in Russia, now more sceptical 2.9million market-peak in 2012, now 2 years in recession, this year will be 3rd year of declines, so yes from that 2.92million 1/3 down, but i still think in long-term Russian market should be biggest in Europe, but problem is that it takes to long, already in 2008 Russia was bigger than Germany for 1st half, but than crisis and 2nd half of 2008 and 2009 were horrible. Anyway Renault-Nissan-Avtovaz still can gain from this with declining market and RUB exchange rates, domestic production should be advantage and Togliatti plant is huge with modern technologies they can produce there more effectively than all other competitors, already Chinese imports are struggling, so RN-Avtovaz advantage should be key factor in next few years for market share gains, also if Ghosn can give Lada new looks, fresher line-up, they can turnaround also Lada brand, right now people prefering foreign brands, but Lada with modern engines, better looking models i think should be doing fine
The real recession is just starting there. We have not seen a wave of credit defaults yet. You may have a 1/3 reduction in overall market, but with the people shifting to cheaper domestics, foreign brands could fare a lot worse. VAZ just laid off 1000+ people, and they were the ones ready to capitalize on the shift to domestics.
I agree in that there is an opportunity for VAZ to capitalize with the Granta, Lada 4x4M, as well as UAZ with the Patriot. They are cheap domestic products that already had a huge price advantage, that will just be increased now. If I were AvtoVAZ I'd be thinking particularly of all of the old rwd and Samara drivers looking to upgrade but are short on cash. They're used to wrenching on their cars so the build quality factor will not be as big of a shock factor. If it were possible to make something that slotted below the Granta pricewise, they might pick up a lot of current rwd Lada drivers.
A cratering Russian economy coupled with leadership that shows no ability or inclination to do anything that might have a positive influence isn't making me more likely to shift towards a more Eurocentric investment strategy. Think I'll go buy some defense industry mutual or something.