The Russian automotive sector is expanding and has a good chance to meet existing payable demand, reports industry minister Mr. Manturov. He said the domestic market has taken fourth place in Europe by volume for the first time.
Car sales have been growing the last three months, and dealers are talking about a shortage of inventory. If the production does not recover until Spring, the market will be short, they say. But the minister said OEMs will handle this challenge easily.
“They have been waiting a long time for the market to grow due to postponed demand. Now, production is slightly behind the demand because it depends on a long supply chain of component makers at many levels in Russia and abroad. For 11 months of 2020 production has fallen by 19.5%, and sales go down by 9.8%”, noted the minister.
Owing to State support exceeding 55 billion Rubles (US$ 733 million) in 2020, an additional 250K vehicles were sold. “We’ll keep supporting programs for 2021, at least for Q1 and Q2,” said Manturov.
At full capacities, OEM production will catch up with demand. Usually, OEMs have a vacation in January. But now the companies are working without stop. Domestic industry has a good chance to fill up the demand. This sector looks better than UK, Germany and Spain.
PSR Analysis: It appears that the quarantine lockdown has affected the Russian automotive industry. But the impact is lower than expected. On the other hand, State measures have supported demand. With all of this, we have a good chance for segment growth this year. PSR
Maxim Sakov is the Market Consultant – Russia Operations for Power Systems Research
