The automotive market will continue to grow next year

28 december 2017

"Over the past several months the Russian automotive market has demonstrated double-digit growth," Analytical Center expert Grigory Mikryukov said speaking at the 25th end of the year automotive conference Automotive Industry 2017 that looked at the performance of Russia's automotive industry in 2017 and the growth prospect for the industry in 2018.

According to the expert, this allowed automakers to sell 1.42 mln cars in the first 11 months of the year (according to the European Business Association), representing 11.7% growth on an annualized basis over 2016. At the current rate of growth annual sales in 2017 may reach 1.6 mln cars, thus exceeding 2015 sales. The low base of last year and delayed demand are playing less and less of a role in the sales growth.

"The main growth factor in the automotive market over all has been the trend in macro-economic performance," said Mr Mikryukov. "We expect the market to continue growing in 2018 as household income continues to grow and people adapt to the new higher prices."

The Analytical Center prognosticates the market can grow by as much as 7-10%. The main contribution to this growth will come from major cities and regions while the share of Moscow will continue to decline. 

The state will keep the level of subsidies at the current level but Mr Mikryukov believes new tools might be needed.

Speaking of electric vehicles the expert noted that despite the popularity of this topic in the media, in the medium term e-vehicles are going to develop slowly in Russia and primarily as part of projects aimed at developing inner-city urban environments. Given the rather unique technical requirements and high prices of e-vehicles, the potential public demand for them is less than 1%.

Photo: from open sources