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Getting up to speed - Russian commercial vehicle market overview - EY - Global

Getting up to speed

Russian commercial vehicle
market overview

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New CV sales forecast, units


New CV sales forecast, units

Source: ASM Holding, J.D. Power, EY estimates

The Russian commercial vehicles market recovered rapidly and showed a 90% increase in comparison with 2009 results. The total commercial vehicle (CV) sales volume accounted for 84,000 units, while production volume reached 72,000 units (+76%).

Despite such significant growth, the CV market is still well below the record volumes achieved before the financial crisis.

Commercial vehicle production

Increase in production was strongly driven by locally assembled foreign brands (+182% versus 2009 results), resulting in their share growing from 11% in 2009 to 18% in 2010. Most of this increase is attributable to the hike in Volvo Vostok and Iveco-AMT productionLocal brands also registered a respectable 62% increase over 2009, despite their share in total production volume decreasing from 89% to 82% in 2010.

In terms of the market structure, all segments registered substantial increase in volumes, except for the used imports segment, which decreased by 31% dropping its market share from 20.5% in 2009 to 7.4% in 2010. Despite the sales of local brands growing by 91% over 2009, their market share remained unchanged at 68%.

However, locally assembled foreign brands witnessed a 190% increase in sales over 2009 and thereby increased their market share to 6% in 2010 (4% in 2009). The most considerable growth was shown by the new imports segment, which grew by 4.4 times and captured a 19% market share.

In 2010, new imports were dominated by truck tractors sales growth.

CV production breakdown by volume, %

CV production breakdown by volume, %

Source: ASM Holding, J.D. Power, EY estimates

CV sales breakdown by volume, %

CV sales breakdown by volume, %

Source: J.D. Power, Mininistry of Industry and Trade of the Russian Federation, EY estimates

In terms of market structure by size of trucks, the medium commercial vehicles segment witnessed a steady sales growth for GAZ, Hyundai, and Mercedes, followed by other foreign brands. While the heavy commercial vehicles market segment is dominated by KAMAZ, foreign brands are showing a faster rate of growth.

Local brands maintain a stable market position primarily due to:

  • Import duty rate of 25% on most new heavy trucks and a prohibitive import duty on used foreign trucks older than five years
  • Large state orders on local brands
  • Price competitiveness compared to foreign offerings

New CV sales forecast, units

New CV sales forecast, units

EY forecast for the commercial vehicle market

In our market scenario, we forecast that commercial vehicle sales in unit terms will continue to grow in 2011, although not at the same pace as in 2010, and is expected to increase by 35%.

However, in 2012, the CV market could be affected by the standardization of Euro 4, which may result in an 8.5% fall in sales. Nevertheless, 2013 and 2014 could witness a robust growth of 27% and 29%, respectively.

In addition to the above-mentioned protective measures, the Russian commercial vehicles market will be further driven by the economic recovery and the improved leasing and credit environment.



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