Russian Automotive Market Study 2014
Russia remains an interesting market for automotive manufacturers, but will probably not be able to meet the industry's optimistic expectations. Quite the contrary: In our latest market analysis entitled "Russia at the crossroads", our experts predict that the number of vehicles sold in Russia per year will rise to just 3.3 million by 2020. This is considerably below the earlier expected figure of 4 million. The shortfall is due not only to the current political crisis, but also to deeper macroeconomic and structural causes. For example: a lack of diversification in the economy, weak economic growth and no stimulus for the market.
"Against this backdrop, we expect the market to decline again this year by around 7%, and only in the next two to three years will it recover back to 2012 levels," says Uwe Kumm, Managing Partner of Roland Berger's Moscow office. "In the short term, the further development of the political situation will be decisive. Over the long term, the market will in all likelihood be able to grow steadily, but much more slowly than previous market studies have predicted." Kumm and his colleagues expect Russian automotive volume sales to increase about 6% annually for the 2014-2016 period, due to a "catch-up" effect, and then dropping to 3.5% annually for 2016-2020. "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," says Kumm. He therefore expects a market of 3.3 million vehicles in 2020 – and with the current political and macroeconomic uncertainties, even that figure is questionable.
Despite this, our experts emphasize the importance of the Russian automotive market. "Russia is and remains one of the top 10 markets with considerable potential," says Jürgen Reers, Partner in Roland Berger's Automotive Competence Center. "Over the next few years, however, it will fall far short of previous expectations, and as a production location it will be driving with the handbrake on, if not actually in reverse."