Categories: BusCommercial VehicleTruck

Russia Commercial Vehicle Market Forecast

Russia is one of the key markets for Commercial Vehicle. Like China and India, this market is also dominated by local players.

Russia — one of the world’s largest oil producers is facing depreciating Rouble currency. High-interest rates and lowered oil prices are affecting the country’s economic growth.

After recession ended last year, the economic growth continues to be weak. GDP kept contracting for seven quarters before growing at 0.3% in the last 3 quarters of 2016 leading to an annual gain of 0.5% in the last quarter. This year it might expand to a net gain of 1.5%.

The makers and suppliers of commercial vehicles, trailers and bodies can also gauge the tangible effects of the political and economic crisis. For example, the decline in demand for food and other investment on consumer’s goods from Europe led to a decline in the volume of freight in Russia which in turn led to a decline in demand for motor vehicles required to transport this freight. This thus affects the demand for commercial vehicles and trailers that are needed to transport this freight.

Russian government raised auto support to 64.1 billion roubles from 50 billion in 2016.

In Russia, the market for heavy commercial vehicles over 6 tons, grew rapidly over the years after the crisis of 2008 and 2009. In 2012 it came to a good 134,000 units – its highest volume ever. However, since then the market kept contracting rapidly. In 2013, new registrations fell by 22% to 105,000 while in 2014 it fell to 81,000 losing another 23%.

In 2009, market touched bottom with 131 thousand units. Commercial Vehicle started to show recovery sign from 2016. It clocked in 4 percent overall growth in CV segment. ACG is expecting that market will continue with single digit growth at least for the next 2 years.

Around 60% of the total market dominated by LCV segment, Heavy trucks generate 23% of the market and 6.6% of the sales belongs to Bus segment.

In 2016, Heavy Truck production segment registered a staggering growth of 11% while Heavy Bus production segment clocked in 50.6% growth compared to 2015.

But the local production, which expanded strongly in recent years, has collapsed since 2014. In some cases, the plants of German commercial vehicle companies are producing at a low level.

In 2017 LCV and Car segment also started to show double digit growth.

GAZ and Kamaz are market leaders in LCV and HCV segment. Kamaz is the market leader in heavy duty truck. After having JV with Daimler, Kamaz introduced new vehicle series for budget segment truck. Recently both companies are working to create and developed new product portfolio with new cabin and Engine by investing 100 billion rubles in next 5 years.

Chinese Truck manufacturers also trying to get more market share by launching new products in the Mass market like Foton introduced new generation product in light duty truck with Cummins engine. GAZ group launched special truck for Oil and Gas segment. This segment is back bone of country economy.

In Premium Truck segment Volvo, Scania, and Mercedes Benz are top three players in Russia.

After Russia became a member of WTO, foreign brands are increasing their market share in the Russian Auto Sector due to new market dynamics of Industry.

Along with neighboring CIS countries, Vietnam, Cuba, countries in Latin America and Africa are also important markets for export. Meeting local product specs, regulation and technology are the key challenges in export.

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