Industry Trend Analysis - Tepid Sales Recovery Still On The Cards - JULY 2017
BMI View: Rising real borrowing costs and weak income growth will limit sales gains in the Russian passenger car market despite improving consumer confidence.
We forecast a 5.0% increase in Russian passenger car sales in 2017 to 1.38mn units as the signs of consumer recovery and stability in wage growth slowly evolve into actual drivers of market recovery over the year. However, we stress that this is only a weak recovery in volume terms given that the market is growing from such a low base and that more meaningful market growth won't begin until 2018. Weak earnings growth, high vehicle prices and an overreliance on debt when the real cost of borrowing is still rising will limit sales gains.
Green Shoots Of Consumer Recovery....
|Recovery Not Gaining Meaningful Pace Until 2018|
|Russia - Passenger Car Sales Forecast, Units|
|f = BMI forecast. Source: AEB, BMI|