Russia's car and light commercial vehicles (LCVs) sales in November increased by 10% year-on-year and 14% y/y in January-November overall to 0.167mn and 1.6mn units respectively, according to the latest data from the Association of European Businesses (AEB). 

As reported previously by bne IntelliNews, the growth rate on the car market remained in the double-digit zone despite the unfavourable base effect, supported by the front-loaded purchases of cars that are expected to continue until the end of the year, with consumers avoiding higher prices on weaker ruble and VAT hike. 

"We believe that the forthcoming increase of VAT, from 1 January 2019, will likely support sales in December," VTB Capital commented on December 7, estimating the FY18 growth rate for the market will remain at 14% y/y, with total car and LCV sales exceeding 1.8mn vehicles. 

Chairman of the AEB Joerg Schreiber also believes that "we can expect a similar strong performance in December, as customers are rushing to take advantage of year-end price deals including the still valid VAT rate."

VTB estimates that the market is likely to continue to grow in 2019, although at a slower pace, while the first months of 2019 might see a decline, as the demand is being pulled forward at the moment. 

In November, Avtovaz increased sales of its Lada brand 15% y/y and remained the market leader with a 20% market share both in November and January-November. Notably, the Group of Avtovaz-Renault-Nissan also remained the largest player on the market with a 34% share both in November and 11mo18, VTB estimated.

VTB also notes some improvement in the recent sales trend of UAZ vehicles produced by Sollers (Hold recommendation with 12-month target price of RUB500 with estimated total return of 17%), but remain cautious on the name at the moment.