Russia’s auto association is bullish about the rest of the 2010 following another big gain in new-car sales last month.
“September again demonstrated a fast-recovering automotive market,” David Thomas, chairman of the Association of European Businesses’s auto manufacturers committee, said in a statement. “With year-to-date growth of 18 percent, up from the 14 percent rate in August, we are seeing all the signs of a strong finish to 2010.”
Sales of new passenger vehicles in Russia surged another 55 percent in September over a year earlier as buyers continued to cash in on a $1.1 billion government incentives program to get older cars off the road and into scrap yards.
September’s gain of 66,313 units, which followed a 51 percent jump in August, brings sales for the first three quarters of the year to 1,321,027 million units, up 18 percent from the same period a year earlier. According to the AEB in Moscow, which reports the data, the strong gains keep the market on track to easily surpass last year’s recession-battered performance of 1,465,917 units.
Earlier this year, as the first round of government incentives began to gain traction in the marketplace, the AEB raised its forecast for 2010 car and light commercial vehicle sales to 1.6 million units from 1.5 million. The AEB outlook, which has not been revised, compares with a more enthusiastic forecast by the research firm Morgan Stanley that Russians will buy some 1,824,000 new cars and LCVs this year.
The incentive program, launched in March with 10 billion rubles (about $334.1 million at current rates), offers owners 50,000 rubles (about $1,670) to swap cars that are at least 10 years old for new models built in Russia. The program was extended during the summer with a 10.5 billion ruble (about $350.7 million) cash injection, indicating enough support to trade about 210,000 cars.
It was extended again in early September, when Prime Minister Vladimir Putin committed another 14 billion rubles (about $467.6 million) to extend the program into 2011.
Combined with a reviving economy in general, the program has unleashed a tsunami of demand for domestic and import-brand carmakers alike. But AvtoVAZ, the Russian maker of Lada vehicles that is the country’s biggest automaker, continues to capture the lion’s share of new sales and widen its market share despite ever-stiffer competition from foreign brands.
Lada’s market share in September widened to 26.9 percent from 23.5 percent a year earlier as its sales shot up 78 percent, fueled by a 180 percent gain for the 2105/2107, the country’s top-selling car. For the nine months, the brand’s share of its home market widened to 27.8 percent from 24.1 percent a year-earlier as sales expanded 36 percent, to 367,765.
Lada cars again held the top four sales spots in September and for the nine months. The four--the 2105/2107, Priora, Samara and Kalina--account for a combined 25.5 percent of the total Russian market for the year to date. (Click on Russia Top 10 table, above right)
All four are dated, if not borderline obsolete models, but remain popular because of low prices and their perceived robustness and simplicity.
AvtoVAZ has said it intends to double its sales in the final quarter vs. a year earlier to 160,000 units, half of which are expected to come from incentives-driven trade-ins.
Foreign makers that assemble cars in the country and qualify for the trade-in incentive include Volkswagen AG, General Motors Co., Ford Motor Co., Renault SA, Nissan Motor Co., Toyota Motor Corp. and Hyundai-Kia Automotive Group.
Kia's surge slows
Among import automakers, Kia continued to challenge Chevrolet’s position as the No. 2 brand in Russia, but fell short both in September and for the nine months. Kia is up 63 percent for the first nine months to 77,745 units while Chevrolet is off 1 percent, to 80,673. Chevrolet was Russia’s top-selling foreign brand in 2009 while Kia finished fifth. (Click on Russia sales PDF, above right)
Two Kia models on the August top-10 sales-leader list, the Cee’d and the Rio, dropped off in September. Rounding out the list of top five brands, Renault sales jumped 66 percent in September and are up 21 percent for the year, to 65,046, to put it in the No. 4 spot. The budget-priced Logan, up 15 percent for the nine months, accounted for 68 percent of the French automaker’s sales for the year-to-date period.
Ford brand, up 61 percent in September, led Hyundai by nearly 1,150 units to retain the No. 5 spot for the month. But Hyundai, up 18 percent for the nine months to date, squeezed past Ford by 426 units to claim No. 5 for the period.
Ford’s Focus rose from sixth place in August to claim the No. 5 sales spot in September and for the year to date, trailing only the four Lada models. With sales up 50 percent in September over a year earlier and 12 percent for the nine months, to 45,502, the Focus now accounts for 74.5 percent of Ford-brand sales in Russia.