Spending on autos increased 64 per cent to a record $33.8 billion, buoyed by $27 billion in sales of foreign makes led by General Motors Corp.'s Chevrolet unit and Hyundai Motor Co. of Korea, the accounting firm said today in an e-mailed report.
Russia is becoming Europe's top car market earlier than forecast by manufacturers as a 10th straight year of growth in the country's oil-based economy coincides with declining auto sales further west. Renault SA Chief Executive Officer Carlos Ghosn said on Jan 30 that Russia would overtake Germany within two years, while Ford Motor Co European chief John Fleming said on June 7 it might do so in 2009.
"Sales will carry on growing at this pace for two or three years as rising incomes fuel demand," said Mikhail Pak, an automotive analyst at IFC Metropol in Moscow. "Government spending on improving transport infrastructure will also be an important factor in stimulating demand for cars."
Russian auto sales are likely to reach 3.8 million this year if the present level of growth is sustained, PwC said. German deliveries may total 3.2 million, according to estimates from the country's VDA trade association published on July 2.
"Russia may become Europe's biggest market in 2008 after surpassing Germany in the six months," PwC partner Stanley Root said in the report, citing VDA figures showing sales in Europe's biggest economy rose 4 per cent to 1.63 million in the half.
Imports Surge: Russian car imports jumped 54 per cent to 785,000 in the six months, almost half of total sales, and purchases of locally made foreign cars rose 41 per cent to 290,000, PwC said. Chevrolet was most popular, with sales reaching 103,735.
Nine of the top 10 overseas carmakers in Russia are American or Asian, according to the PwC report. GM sells Chevrolet's Lanos and Aveo sedans and Lacetti compacts there, together with the Opel Astra, and aims to open an assembly plant near St. Petersburg in November to boost production.
Hyundai, based in Seoul, ranks second with sales of its Accent small car and Getz hatchback. Ford is placed third, with the Focus and Fusion sedans.
New Capacity: At least 10 foreign automakers have factories or joint ventures in Russia and production is being expanded monthly. PSA Peugeot Citroen of France, Europe's second-biggest car company after Volkswagen AG, last month began work with Mitsubishi Motors Corp. of Japan on a
