The forecast of automotive market development in early 2015 was more optimistic than the current situation at the end of September. The Association of European Businesses expected drop in sales by 24.5% (to 1.89 million), the Ministry of industry and trade – by 24% taking into account measures of state support (up to 1,98 million cars).
In September 2015, sales of new cars and light commercial vehicles in Russia decreased by 28,6 % (56 367 sold units) compared to September 2014 and amounted to 140 867 cars. Overall, by the results of January-September 2015 in Russia 1 192 723 passenger cars were sold that is 33% lower than the same period last year.
Joerg Schreiber, Chairman of the AEB Automobile Manufacturers Committee, said that sales in September did not improve forecast for remaining 3 months and left it at 1.57 million cars that will be 37% lower to the results of 2014.
The main negative impact is unstable macroeconomic situation that continues posing challenges in the automotive market in 2015. According to the consensus-forecast of rating agencies and investment banks, Russia’s GDP will decline this year by 3.5%, inflation rate will increase to 11.6%, weakening of the ruble will continue and fall in real incomes of the population will be 2.8%. A significant negative factor, according to PwC, will also be the continued growth of car prices. Kommersant.ru reported that such manufacturers as Ford, Suzuki, Peugeot and Citroen have already increased prices on its products by about 5% from the 1st of September 2015.
Russian dealers in the early summer 2015 made a more pessimistic forecast, expecting sales decline by 40%. According to the results of a joint survey EY and the Association of ROAD became known that significant number of closed dealerships in 2015 was caused by falling profits, rising risk of bankruptcy and high debt load (57% of companies have started or plan to start negotiations with their creditors to revise the terms of debt service). These risks are caused by insufficient diversification of income sources, significant portion of which are sales of new vehicles.
PwC notes that, in addition to stimulation of demand by state support and auto crediting, the following factors will be able to restrain negative trend on Russian car market: novelty of model range and level of localization. On the one hand, brands offering new models with a moderate increase in prices appeared to be in more advantageous situation; on the other hand, increasing localization of brand production on the Russian market will restrain prices. In evaluating PwC, sales of the Russian brands Lada and UAZ will fall by only 10% (370 thousand cars per year), foreign cars of Russian production by 33% (860 million). The largest decline expects importers that do not have plants in Russia, by 55% (to 290 thousand cars). As a result, the market share of Russian brands will be 17.5-24%, produced in Russia foreign cars – 54-56%. The share of imported cars will be reduced from 27,8% to 19%.
Another possibility for business development of Russian car manufacturers in conditions of the ruble weakening and state support will be expanding exports.
During the Conference “Autoevolution-2015”, held in Kaluga, it was forecast that in 2015 the Russian car exports may increase by 50-60% compared to 2014 (up to 150,000 to 200,000 cars). The total power of Russian plants could produce up to 3 million cars annually, but due to the crisis and optimization of production conveyors are loaded by no more than 40%. According to the publication Kolesa.ru, Hyundai is looking for the possibility of opening new centers in Russia, planning to expand the capacity of St. Petersburg plant for the new crossover Creta and to increase the exports of Solaris (assembled in Russia) to the Middle East.
PwC estimates that in 2016 the car market will begin to recovery, increasing sales by 6.7% to 1.6 million cars, but the sales level of 2014 (2.3 million) will be able to achieve by 2018. According to the long-term forecast, 3.1 million cars will be sold in 2025 in Russia.
Sources of information: Association of European Businesses, Ministry of industry and trade, PricewaterhouseCoopers (PwC), Ministry of economic development, joint survey EY  and the Association “Russian automobile dealers” (ROAD) , Conference “Autoevolution 2015” , Kommersant.ru , Kolesa.ru .