Luxury Cars Avoid Falling in Russia

Sales of super luxury vehicles have increased by 97%, while the average sales slump in the automotive industry was 30% in the first half of 2015.

Abel Amón. 31/07/2015
Mercedes S-Class Maybach

Rolls Royce increased sales of its cars by 40%, selling 97 units so far this year, also it has been sold a Lamborghini more than in 2014, but certainly the star car was the Mercedes S-Class Maybach. Perhaps the German we should consider  a premium brand that a pure luxury one , however because of its  price (in Russia may reach 200 000 EUR) and its impressive performance the  Maybach Mercedes S-Class is really a luxury car (“the essence of luxury”, as the company says).

Mercedes Benz S-Class
Mercedes Benz S-Class

80% of sales of the most expensive cars takes place in Moscow (including St. Petersburg, the second largest city in Russia contributes only 8% of sales), which gives an idea of ​​the enormous difference between the economic potential the capital and regions. Besides his brilliant Maybach, Mercedes-Benz has had acceptable performance with a slight sales growth in the first half of the year.

Porsche follows with increased sales  after the end of last year the Russians bought many of their cars to protect the ruble devaluation and a possible bank failure. The company has increased its sales by 18%. The remaining cars Premium brands have had a disappointing performance in the first half of the year. BMW falls a 26% Audi (a 32%), Jaguar (a 51%), the GM group (67% decline) really touched to the point that as we already have in these pages was forced to close its Opel plant in St. Petersburg.


Very worrying situation in the sector.
While the average annual fall in Russian industrial production was 4.7%, in the case of the automotive industry, as we have said, it is  30%. A key sector, it generates a very important additional around industry and is also an indicator of consumer confidence. For Russia, this situation is particularly serious, given that the automotive industry has been one of the few capable of attracting foreign investment, which is a key issue for  the development and modernization of its economy.

Unless manufacturers we have indicated that the rest of the models felt sales in 2015 and remember that in 2014 had already produced a 10% reduction. Russian brand vehicles AvtoVAZ (Lada) and Koreans Hyundai and Kia, are leading sales. These are the best-selling cars in 2015: Granta -Lada, Solaris -Hyundai and New Rio -KIA.

Lada Granta
Lada Granta

The Russian government is trying to alleviate the situation.
One of the tasks entrusted to the Prime Minister Dmitri Medvedev and his economic cabinet has been to implement measures to reverse this situation. It’s very complicated, because the sanctions imposed by the West, the fall in oil prices and other key materials to Russia, have provided the collapse of the ruble, which seemed recovered in mid-year, however, and affected by the situation in China which in turn has adversely affected the oil market, it has become devalued in a month almost 10%. This implies falling purchasing power and buying a new car is virtually inaccessible to most Russians.

However, measures such as the renewal of the official vehicle fleet, for which the Russian government plans to invest 160 million Euros and other measures as subsidizing  part of the financial burden to buyers of new vehicles, intended to shed light. The objective is that sales will increase by additional 200 thousand vehicles. Considering the current economic climate, that so far only 2015 782 000 units were sold hardly seems a reachable goal.

Hyundai Solaris
Hyundai Solaris

Disclosure: The author is not responsible for the views expressed in the article. The text was 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.

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