Russia Automotive industry outlook stands negative although moderately after the prolonged crisis started four-year ago. The 2017 is set moderately down while it will be crucial for future recovery.
The modern Russia has inherited a considerable number of automotive plants from the Soviet planned economy, which was capable to produce a large number of cars per year. However, due to their outdated technologies and design, it has been almost difficult for these factories to compete with the foreign brands and required huge investment to be modernized.
The solution was to invite foreign manufacturer to invest locally in joint venture but when Russia joined the WTO, in early years of the second millennium, the open competition had really evolved the domestic market and production, with finally positive effects to the technology, safety, price and te market boomed joining the club of biggest markets, with a record of 2.9 million annual units hit in the 2012, when over tow third of vehicles produced locally by a plants capacity of 3.2 million annual vehicles.
The UE and US sanctions following the “2013 Ukraine crisis”, had been focused on strategic sectors, with relation with military sector, and the automotive industry was in the target, being hit with unprecedented effects, both on new vehicles and parts supply. The economic crisis that enveloped the country, hit the consumer’s demand, while vehicles prices had been increased to balance the increased cost. The market collapsed. At the end of 2016 it was the half of the 2012.
In the 2017 declined has bottomed up but there are not in place conditions for recovery. In our research we figure out a selected recovery during the next five years but most will depend by the evolution of international relations and on this aspect, the 2017 will be crucial, as new leaders can fallow Mr. Trump on the scene.
Research, Consulting, Data & Forecast
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Market Researches in PDF are immediately available for download with study on the market since 2005 and with forecast up to the 2022.
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