With a population of over 140 mio., Russia is an attractive market, measured by the number of potential consumers. With a pre-crisis GDP-growth of 8% and a post-crisis growth of 4%, Russia’s economy is growing fast, compared to other European markets.

The Russian automotive market was hit severely through the economic crisis in 2009. The new car market collapsed to 50% of the volume of 2008. However, the crisis led to a change of what was believed to look like the future of the Russian automotive market: pre-crisis estimates saw Russian brands lose strongly or even go out of business in the future. Today, it looks like some Russian companies will play a major role in the automotive market in the future, driven by the increased attention during the economic crisis.

During the crisis, several smaller Russian car makers, mostly only focussing on contract assembling, went bankrupt. Almost all projects scheduled by foreign OEM were canceled. AvtoVAZ, Russia’s leading car maker, received strong support through Russian government initiatives still in force in 2011. UAZ now is part of the new Russian Sollers group. Some new Russian brands like Vortex from TagAZ and Chance (from Ukrainian ZAZ) are appearing.

The old industrial assembly regime, granting preferential treatment to companies manufacturing in Russia, is about to be changed into a new regime, starting from 2012. The new regime requires much heavier investments (capacity of participants need to reach 300.000 units p.a.) and certain localization rules. This move will lead to 6 to 8 large national car makers in Russia and a more sophisticated supplier industry in Russia. For suppliers, investments in Russia will become more attractive.

It is not only foreign car makers that are of interest to foreign suppliers. Russian car makers also need to improve quality which Russian component manufacturers are not always able to deliver. Given both a growth in local production of foreign cars and the potential need of Russian OEM to source better quality, now is an excellent time for suppliers to enter the Russian market.

The consumer potential together with increasing income makes Russia one of the most attractive markets for the world automotive industry. In 2015, Russia is expected to be the largest car market in Europe, overtaking Germany.

2011 will be the year when more locally assembled foreign car will be sold in the Russian market than cars of Russian origin. This portion will increase strongly, due to the new industrial assembly regime, which fosters local production of cars. Imports of new cars will also grow, but at a much lower level. This growth will be driven also through Chinese companies, which are about to discover the Russian market. New car sales will exceed 2 mio. units in 2011, still far away from almost 3 mio. units in 2008.

Car loans and leasing is about to gain ground again after the crisis. During the crisis, the loan market was subsidized heavily through the Russian government (and with a focus to Russian car models). Today, companies that went out of business during the crisis are re-appearing. This will drive the market considerably.

Import duties are said to stay at the prohibitive level for older used cars, according to recent statements from the Russian government. Russia’s WTO-entry seems to be postponed, since Putin seems to continue his policy of isolating Russia at least from the Western hemisphere. This would also be a major driver for the new car market, especially low-end models.

In general, access to new cars is getting better in Russia. In a vast country, however, not all regions are covered well through dealers of all brands. Of course, one concentrates on the regions with the most potential. For the Far Eastern Federal District, a government subsidized shipment program was set-up, since this region traditionally is only scarcely populated and there is no OEM manufacturing in this region. With high import duties on older cars, the Far East war especially hit, cause the major source of cars where Japanese used cars. Without the measure, the Far Eastern District would have been cut off from car supply.

In line with sales of new cars, the car parc is increasing at a compounded rate of 6,4% from 2005 to 2015. Alongside with the car parc, the aftermarket is growing fast as well. As is the case with the primary market, the aftermarket is interesting to foreign parts makers as well.

Main distribution channels for spare parts are service stations, of which 70% are independent (but not all are very professional), and spare part shops. Faked parts are a continuing problem in Russia, but mainly for Russian brands.

The coverage with service stations and spare part shops is still insufficient, which is also due to the low people-penetration in some regions.

In total, the Russian market for passenger car vehicles and respective components and spare parts is again highly attractive. The main challenges are setting up an effective distribution system in order to access customers countrywide, coping with falsification of parts and handling regulatory uncertainties of still developing legal and administrative systems.

This report is the update of our report published in 2006. It covers data from 2010 and forecasts from 2011, 2012, 2013, 2014, and 2015. To prepare this market report, we used primary and secondary research methods: expert interviews and consumer surveys – in particular for the market of automotive parts, which is not covered yet by any substantial statistical data – and standard analysis of secondary information available on the topic. Based on our experience and developed competencies we have built proprietary market models to forecast future market development. The report was compiled in the period from August to September 2011 and includes respective information.

Globis is a Germany-based consulting company with broad international coverage regarding strategy development, especially entry strategies into new markets.








2.1 Economic Development 11

2.2 Regional Economic Development 13


3.1 Russian Car Parc 15

3.1.1 Structure of Car Parc by Age 16

3.1.2 Structure of Car Parc by Brands 17

3.1.3 Car Parc in Regional Markets 19

3.2 Passenger Car Sales and Imports 22

3.2.1 Size of Market 22

3.2.2 New Car Sales by Brand and Model 24

3.2.3 Sales Drivers 28 Government programmes 29 Import Duties 29 Car Loans / Leasing 30 Local Production of Passenger Cars 32 Dealership Networks / Distribution Systems 33 Used Car Market 36 Consumer Preferences 38


4.1 Production of Foreign OEMs in Russia 42

4.2 Russian OEMs and Assembling Plants 44

4.2.1 AvtoVAZ 45

4.2.2 Sollers 46

4.2.3 GAZ 47

4.2.4 TagAZ 47

4.2.5 Other Russian Manufacturers 47


5.1 Market Size for Components and Spare Parts 49

5.1.1 Primary Market 49

5.1.2 Aftermarket 54

5.2 Distribution System for Spare Parts 59

5.3 Consumer Behaviour Regarding Car Service and Spare Parts 64



7.1 Districts and Regions in Russia 69

7.2 Population and Area in Regions 71

7.3 Major Russian Cities 74

7.4 Regional Passenger Car Parcs, 2006 79

7.5 Custom Regulation for Car Imports, 2011 84

7.6 Selected Russian Component Manufacturers 85



List of Figures

Figure 1: Map of Russia with Federal Districts 10

Figure 2: Development of GDP Growth Rates, Change in % to Previous Year, 2005-2012 11

Figure 3: Development of Real Income, Change in % to Previous Year, 2009-2012 12

Figure 4: Unemployment Rates, in %, 2006-2011 13

Figure 5: Development of Passenger Car Parc, Total and Foreign, Mio. Units, 2005-2015 15

Figure 6: Structure of Russian Car Parc by Age, 2010 17

Figure 7: Top-15 Brands in Russian Car Parc, 2010 18

Figure 8: New Car Sales in Total, Mio. Units, 2005-2015 22

Figure 9: Relative Sales and Import Structure of Car Market, 2005-2015 24

Figure 10: Car Financing / Leasing, Share of Total Sales, 2010–2015 31

Figure 11: Key Criteria Influencing Car Choice in Russia, Single-Choice 38

Figure 12: Production of Passenger Cars in Russia, Mio. Units, 2008-2015 40

Figure 13: Primary Market for Russian and Foreign Brands, USD bn., 2005-2015 50

Figure 14: Geographical Location of Major Automotive Clusters in Russia 53

Figure 15: Russian Aftermarket, USD bn., 2010-2015 57

Figure 16: Distribution System for Spare Parts in Russia 59

Figure 17: Where Russians Buy Spare Parts, 2011 63

Figure 18: Consumer Preferences: Original or Independent Aftermarket Spare Parts, 2006 64

Figure 19: Monthly Expenditures on Car Repair and Maintenance, 2006 65

List of Tables

Table 1: Russia – Country Facts, 2010 9

Table 2: Population Development, in 1.000, 2005-2009 11

Table 3: Retail Turnover Development and Status in Federal Districts, 2009-2010 14

Table 4: Main models in Russian Passenger Car Parc, 2011 19

Table 5: Passenger Car Parcs of Federal Districts, 2010 20

Table 6: Car Parc in Larger Russian Cities, 2009 21

Table 7: Sales of 30 Top Brands, 2009-2010 26

Table 8: Sales of Top 25 Car Models, 2009-2010 27

Table 9: Sales by Segment, 2008-2010 28

Table 10: Dealership Networks of Top Brands in Russia, 2011 34

Table 11: Major Russian Automobile Dealer Companies, 2011 35

Table 12: Second-Hand Car Sales by Age and Brand, 2010 36

Table 13: Selected Second-Hand Car Dealers in Russia, 2010 37

Table 14: Production Capacities of Car Makers in Russia, 2010 42

Table 15: Foreign Component Suppliers in Russia 52

Table 16: Major Automotive Clusters in Russia 53

Table 17: Top Spares of Foreign Car Parc, USD Mio., 2010-2015 58

Table 18: Top Spares of Russian Car Parc, USD Mio., 2010-2015 58

Table 19: Large Spare Parts Importers and Wholesalers in Russia, 2011 60

Table 20: Major Aftermarket Networks Present in Russia, 2011 61

Table 21: Major Chains of Independent Service Centers in Russia, 2011 62