The year-long recovery in automotive sales continued in April with Russia's car and light commercial vehicles (LCV) sales up 18% y/y to 152,425 units in April, the Association of European Businesses (AEB) reported on May 8.

Sales saw some acceleration from the March number, up 14% y/y, according to AEB that track sales. YTD sales were up 21% y/y to 452,509 units.

“The April data points to the continuation of the positive sales trend observable so far this year. However, we would refrain from being excessively upbeat at this point, as the recent ruble weakness might have pulled forward some demand among potential worries about future price increases. We also note that after two consecutive months of sharp declines, Sollers managed to increase its UAZ sales by 6% y/y in April. We remain cautious on the name, as the overall sales trend remains weak,” VTB Capital (VTBC) said in a note.

Market demand was still driven mostly by the mass brands with Russian names continuing to lead the way. The maker of the iconic Lada, Avtovaz, increased its sales 17% y/y in April, with its Lada brand remaining the market leader, with a 20.1% share.

Lada was followed by KIA (+22% y/y, 12.9% market share) and Hyundai (+16% y/y, 10.5% market share), AEB reports.

The premium brands were mixed again. Some brands increased their sales in April, including Lexus (+28% y/y), Volvo (+17% y/y), BMW (+15% y/y), Cadillac (+12% y/y), Mercedes-Benz (+6% y/y) and Porsche (+5% y/y). Meanwhile, others declined, including Audi (-7% y/y), Land Rover (-7% y/y), Jaguar (-9% y/y) and Infinity (-15% y/y).

Sollers increased its UAZ sales by 6% y/y in April, but a more favourable base might have played a certain role, as UAZ sales were down 22% y/y in April 2017. YTD sales of UAZ vehicles still fell 17% y/y, although we believe that a more sympathetic base effect in the coming months will help reduce this decline by the end of the year. Nevertheless, we are cautious on the name, as the sales trend remains hardly encouraging.

Ford sales, which are conducted through the JV with Sollers, continued their strong recovery from the low base of last year. In particular, April sales were up 21% y/y, while YTD sales increased 31% y/y.

Finally, GAZ LCV sales increased 12% y/y in April and 10% y/y in the first four months of this year.