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Russia to be global car force

2011-02-18 09:01
MOSCOW - The Russian car market could become the world's sixth-largest by 2020, up from 10th currently, by selling four-million cars a year on the back of foreign partnerships, modernisation and increased local production, a consultancy said.

The market, which halved in 2009 in Russia, tailing off the other growing emerging markets, is projected to grow at eight to 14 percent a year and reach pre-crisis yearly sales volumes of three-million cars by 2013, the Boston Consulting Group predicted.

Ewald Kreid, head of the Industrial Goods practice in BCG's Moscow office, said in the note: "The Russian automobile industry has been the roller-coaster of the BRICs... for the past 18 months, but now it is firmly back on track."


The group expects Russia to overtake Germany by 2018 as the largest market for cars and light commercials in Europe, BCG said. The market was now recovering with the Russian government expecting close to 15 percent growth in its car market through 2011, around half of that of 2010.

About 70 percent of the 2010 growth came from the government's cash-for-clunkers programme, initiated to help Russia's flagship automaker AvtoVAZ cope with the crisis. It boosted AvtoVAZ's Lada brand sales by 3.7 percent and will continue to fuel the sector's growth through the first half of 2011.

Sales of cars and commercials rose 30 percent to 1.91-million in 2010 from 2009 levels but still fell 34 percent short of the pre-crisis 2008 totals, according to the Association of European Businesses.

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