Porsche has good prospects in Russia
Both car and luxury industry are struggling in Russia. But there are some exceptions.
After a month of great turbulence December, it seems that the Russian economy improved something in the beginning of 2015. The rouble, which was in free fall has appreciated slightly against EUR and USD, Moscow Stock Exchange also showed a substantial recovery (20%). Undoubtedly, the rising price of oil has been the engine of this improvement in the Russian macroeconomic environment.
Moreover, in mid-February there were some hopeful negotiations in Minsk to agree imminent cease-fire and to give rise to a hypothetical relaxation in the sanctions imposed US and EU to Russia for its position on the conflict taking place in Ukraine. Unfortunately, the ceasefire did not just occur and sanctions, as well as a possible extension of such sanctions continue on the horizon.
It is expected that the economy into recession in 2015. The official inflation has exceeded 15% and the actual loss of purchasing power of Russian households is estimated at around 10%. In this context, the luxury industry is going through difficulties, and not only in Russia but mostly by the reduced presence of its citizens in other countries where they used to travel and especially where they have traditionally consumed luxury products. Serve the fact that in Spain, though foreign tourism grew in 2014 , the fall of Russian visitors has been estimated at 17%.
Luxury stores in the Russian capital allowed drop in sales, the automobile industry has slowed the tremendous growth that had their investments and projects and the fall is estimated at 30% in this sector.
A clear indication that luxury brands recognize Russia’s decline is also the fact that luxury brands they planned to initiate or increase its direct operations failed, at least for now. Gucci is an example of a brand that has stopped opening stores in Russia in 2014 amid turbulent market conditions. Many other international luxury brands still slowing operations stop opening new franchises that basically distributed among the three major players, multinationals, that dominate the market.
The year 2014 has been quite poor in opening new stores, most of which occurred around the city of Sochi, home of the Winter Olympics. Since most luxury goods link the price to strong currencies, while the income of most of Russians is in roubles, a fall between 30 and 40% in retail luxury is expected. However, there are some exceptions.
Porsche: good results in 2014.Optimism for 2015. However, not all companies in the luxury industry are suffering in Russia. Porsche sales grew significantly in 2014, and expect a good performance in 2015.
«Porsche Russland» demonstrated outstanding performance by customer growth in 2014. 4707 cars sold exceeding the result of the previous year by 24.2 percent. The company continues to successfully pursue the objectives according to their so-called «Strategy 2018». In 2014, the company Porsche AG has delivered to customers around the world, a total of 189,850 new vehicles, which is 17% more than last year. «We have everything to expect in 2015 fourth year of record sales and a increase of the followers of our mark, with highly motivated employees achieve those goals» said Bernhard Maier, responsible for marketing and sales for the group.
Among the undisputed sales leader remains Porsche Cayenne, although the model has now been on the market for over 10 years. In 2014, the Cayenne has been chosen by 2387 buyers. The second in the table top with dignity sales took a new compact sports SUV Porsche Macan with 1,417 vehicles sold, although they only entered the market in April 2014. The Porsche Panamera sports sedan and the legendary Porsche 911 Carrera also surpassed the results of 2013, an increase of 40.0 percent and 34.4 percent respectively. The fact is that in large Russian cities, despite the crisis there are a number of luxury cars in the streets can hardly see in other European cities.
Disclosure: The author is not responsible for the views expressed in the article. The text has been written freely expressing ideas, without receiving any compensation. The author has no business relationship with any of the companies whose shares are listed in this article.