Warc, 13 May 2014
MUNICH: The Russian vehicle market is forecast to contract
sharply this year and while it will recover in future, its long-term growth
will be well below previous predictions, according to a new report.
Roland Berger Strategy Consultants forecast that the number
of vehicles sold in Russia would fall by 7% during 2014 and would subsequently
rise to 3.3 million a year by 2020, compared to the 4 million that had been
earlier expected.
It attributed this development to political uncertainties
and the tensions with Ukraine in the short term, as well as deeper
macroeconomic and structural causes, including a lack of diversification in the
economy, weak economic growth and no stimulus for the market.
"The market is still attractive, but the previous
forecast of over 4 million vehicles sold in 2020 cannot be met, even in an
optimistic scenario," said Uwe Kumm, managing partner of Roland Berger's
Moscow office.
The share of imports is likely to increase from the current
figure of 30% to nearer 50% during this period as World Trade Organisation
concessions allowing support for local production are due to expire in 2018.
"At that point, the advantages of manufacturing in
Russia will disappear," according to Jürgen Reers, partner in Roland
Berger's Automotive Competence Center.
Many international manufacturers will then significantly
scale back their production and local value added in Russia from their original
plans.
Roland Berger suggested that it would no longer be
profitable to produce models with fewer than 25,000 units per year in Russia
and said that of the vehicle models currently manufactured locally by foreign
manufacturers, more than 40% could be imported to Russia in the future.
"That's why automotive manufacturers and suppliers have
to quickly take counteraction and realign their strategies," said Reers.
Data sourced from Roland Berger; additional content by Warc
staff
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