"According to our estimates, in 2017, under the conditions of state support, the automotive market may grow by 10-11%. Without the state support, the negative dynamics of the industry may continue, and the decline will amount to 3%," said Grigoriy Mikryukov, Head of Department for Sectors of Economy of the Analytical Center at the conference "Russia’s Automotive Market 2017. Results and Forecasts". In 2018, the market will begin to recover due to the positive dynamics of the main macroeconomic indicators, added the expert. The calculations have been made on the basis of the model developed by the Analytical Center, and rely upon the implementation of the baseline scenario of the forecast of the Ministry of Economic Development of the Russian Federation.
The volume of demand on the Russian light motor vehicle market has been decreasing since 2013. In 2016, the sales volume decreased by 51% and the volume of registrations— by 52% in comparison with 2012. Within the framework of the strategy for the automotive industry adopted in 2010, mechanisms and incentives for the development of domestic and localized production were created, as a result of which, the total production capacity reached 3 million units per year, while the share of imports decreased to 20-25%. The downswing in the domestic market and limited capabilities for exporting products led to reducing the level of capacity utilization, which in turn led to underemployment in the industry, reduced profitability, and in some cases — to losses of companies and closure of plants.
"Focusing on the preservation and development of the domestic automotive industry, the state regularly allocated significant funds to support the industry through various instruments. In 2015 and 2016, their volume has amounted to more than RUB 100 bln," reminded Mr. Mikryukov.
"At the same time, it is important to understand that different effects can be achieved ‘within the framework of the program’ and ‘thanks to the program’," emphasized Mr. Mikryukov. When elaborating the development model of the Russian automotive market, the Analytical Center tried to directly assess the contribution of the support programs into the dynamics of sales volumes. "The comparison of the expected and the actual dynamics in different periods in the context of the factor of state support became the basic methodological idea," said Mr. Mikryukov. "The analysis revealed that the recycling program in 2010 turned out to be the most effective: a growing market and a large number of cars older than 10 years can be called as the main reasons for the success of it." The expert has drawn attention to the fact that only direct contribution of the program was evaluated, while indirect effects associated with the possibility of car manufacturers to keep the prices down, to ensure a minimum range of products on the market, as well as the capacity utilization, were not taken into account.
Mr. Mikryukov recalled that last year, the project of the Strategy for development of the automotive industry until 2025 was discussed twice at the site of the Analytical Center. The representatives of the industry taking part in the discussions stated that concessional auto loan financing was an important factor for supporting the demand. "Nevertheless, according to our observations, the given program redistributes the flow of customers rather than creates the new demand, as redistributes the flows of customers," noted Mr. Mikryukov. "At the same time, the impact is definitely obvious, since without this program, the buyer could have moved to the secondary market."
As for the prospects, in January 2017, a list of measures aimed at ensuring a stable social and economic development was approved. According to the document, it is planned to allocate RUB 62.3 bln to support the automotive industry in 2017. In particular, RUB 10 bln will be allocated for concessional auto loan financing, which is comparable to the volumes of 2016. "Allocating RUB 10 bln, the government takes into consideration the commitments of previous years — that is, compensation of banks expenses on previously issued concessional loans (up to 70% of the total sum)," clarified Mr. Mikryukov. In addition to the traditional programs for support of the demand, such as the concessional auto loan financing and the recycling program, the Ministry of Industry and Trade of the Russian Federation has offered several new programs that should be tested during this year — "The First Car", "Family Car", "Russian Tractor", "Russian Farmer", and others, for the financing of which, together with the support for sales of gas vehicles and urban public electrical transport, purchase of school buses and ambulances, it is expected to allocate RUB 17.4 bln.
Mr. Mikryukov believes that enhancing of the government supportive tools efficiency, within the automotive industry in particular, is the essential vector of the governmental policy. "The industry itself can play an important role in the formation of an optimal set of activities and the improvement of effectiveness of the supportive measures — indicating the bottlenecks and providing information on the effectiveness of measures undertaken," he concluded.