Russian passenger car sales increased 11.9% in 2017 to 1.6mn vehicles, according to the Association of European Businesses (AEB), as the car market recovers on the back of growing real incomes.
In December car sales rose 14% to 166,000. Russia's passenger car market remains the fifth-largest in Europe by sales volumes, in between Italy and Spain.
Among the top-10 selling brands, the best performers were Kia (+22%), VW (20%), and AvtoVAZ (+17%). Sales of Sollers brands dropped 16.5%.
“Last year the market grew for the first time in the past four years, while the December figures were in line with the previous months. The 2018 outlook is not very clear to us, but our rough expectation is a moderate 5-10% y/y actual market growth. Neutral for car manufacturers,” Aton said in a note.
The nature of the market is changing too. For most of the last year the Russian-made brands have been the number one top sellers as Russians trade down to cheaper models. However, in the second half of the year the foreign-made brands reasserted themselves. Given the choice, Russians proved already they prefer the foreign-brands if they can afford them. Foreign producers saw sales grow twice as fast as Russian-brand sales in the second half of the year.