Boston, MA -- (ReleaseWire) -- 11/15/2012 -- A 14% year-on-year (y-o-y) rise in new light vehicle sales in the first seven months of 2012 and the continued expansion in consumer credit has prompted BMI to revise up our 2012 Russian vehicle sales forecast from a 6.3% rise to growth of 12.3%.
Credit to individual borrowers expanded 42.3% y-o-y in May and with default rates falling, the momentum of credit expansion is likely to remain strong. We accordingly forecast passenger car sales to maintain strong growth, averaging 9% y-o-y over our forecast period to 2016.
We expect Russia to be increasingly become a key growth market for commercial vehicles (CVs) within Europe on the back of moderate increases in industrial production and weakness in the wider European market. With growth in sector expected to average 11.6% y-o-y, we forecast Russian commercial vehicle sales to reach 494,442 units by 2016.
Our outlook for vehicle production remains unchanged. On the back of the domestic demand potential and the consequent increase in investments by original equipment manufacturers (OEMs), we expect annual vehicle production growth to average 13.5% y-o-y between 2012 and 2016, reaching 3.74 units by the end of our forecast period - more than three times the level in 2009. Growth will be led by increased investment from international carmakers, which will be looking to establish joint ventures and partnerships with local participants to gain knowledge of the domestic market.
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In July Renault announced it will begin selling Automobile Dacia vehicles in Russia, rebranded under the AvtoVAZ (Lada) badge. The Dacia Logan MCV model, which will be re-badged the Lada Largus, will be made at AvtoVAZ's production facility in Togliatti using parts sent from Dacia's plant in Mioveni, Romania.
In the commercial vehicle sector, Daimler has started work on the project to set up Mercedes-Benz Sprinter production at the Gorky Automobile Plant (GAZ) in Nizhny Novgorod. Under the terms of the deal agreed between Daimler and GAZ that came into force in May 2012 Daimler will invest more than EUR100m (US$125.1mn) in the product, including its production processes and sales network.
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