Russia on pace to top Germany as largest European car market

Article by Anita Panait, on July 20, 2013

Russia is on pace to surpass Germany as the largest auto market in Europe and fifth globally by 2020, according to a Boston Consulting Group report said. Western carmakers like Ford, General Motors, Renault and Volkswagen have made significant investments in Russia, wagering that the market will increase as a rising number of middle class Russians make their first car purchase or replace their old units.

The report expects that Russia can follow China and Brazil in transforming itself into a market dominated with locally produced vehicles. Boston Consulting expects the Russian auto market to grow by an average annual rate of 6 percent through 2020, when it is expected to hit will annual sales volume of 4.4 million. By then, Russia would become the fifth largest auto market in the world in terms of sales, next to China, the United States, India and Brazil.

In 2012, Russia was seventh globally in terms of sales next to China, the U.S, Japan, Brazil, Germany and India. The car-to-inhabitant ratio in the country is currently 290 cars per 1,000 Russians, while the ratio is 560:1,000 in Western Europe. Likewise, many of those vehicles in Russia are aged.

Ewald Kreid, one of the authors of the report and a partner at BCG, remarked that Russia is an attractive market in terms of cars per thousand inhabitants, thus they are “bullish long-term.” He remarked that doesn't mean that every year will be a good year for car sales in Russia. [source: automotive news - sub. required]

Topics: russia, germany

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