Europeans fed up with changing cars

Car sales have been dropping in Europe for six months. According to the report of the Association of European Car Manufacturers ACEA, in the European Union the number of registrations of new cars has dropped in September compared to the same period of last year by 9.6% to 1.2 million. The major national markets are currently China, USA and Russia.

Over three quarters of 2010, the number of registered new cars in the EU has declined by 4.3% and amounted to 10.2 million. The most significant drop in demand for new cars occurred in Spain (by 27.3%), Germany (17.8%), Italy (18.9%), UK (8.9%) and France (8.2 %). Greece fell to 49.9%.

At the same time Germany lost the title of the largest EU market, and the British car market became a leader, where this month over 335 thousand vehicles were sold against the German 260 thousand. According to Bloomberg, the supply of Fiat fell during the reporting period by 21% (up to 86,773 thousand cars), Toyota performance decreased by 21% (57,573 thousand), and Ford sales fell by 20% (108,700 thousand).

In Russia, the recycling program has created a boom in sales. In September, the demand for new cars and light trucks has increased by 55% and reached 186 thousand. In the nine months of this year 1,000,321 cars have been sold on Russia, which also corresponds to an increase of 18% over the same period of last year.

Taking advantage of the situation, the Russian government encourages foreign automakers to raise the level of localization of its vehicle production. The Ministry of Industry and Economic Development had prepared their projects which offer to renegotiate and renew agreements on industrial assembly with foreign producers after the inclusion of new requirements for increased production of components in Russia.

Annual renewal of preferential imports of auto components provide for an obligation to establish stamping of body parts in Russia (at least 20 positions, including major).

For the extension of preferential treatment for two years, companies are encouraged to produce cars in Russia under the Russian brand on their own platforms (or acquired under license), with the development of original parts. In case of the commitment to establish up to 30% of the car engines or gear boxes made in Russia, the Ministry of Economic Development has plans to extend the agreement for 4 years, in case of the installation of both units - for 6 years. Cooperation between the companies is possible for the production of components in Russia, wrote Bigness. ru.

The new rules are designed so that if Russia joins the WTO, the domestic auto industry (in its current form) does not "die of shock immediately." "It could happen because the market of Russia will be flooded with cheap new cars and a large number of used cars," says analyst of Investcafe Maxim Lobada.
The new rules are intended to replace the notion of "Russian Automotive Industry" with "partnership with foreign companies, "the analyst believes. "Our plants with be upgraded and will be used to produce cars based on foreign models. There is a tendency: AvtoVAZ-Renault, Kamaz-Daimler, Sollers-Fiat," notes Lobada.

At the same time, the design of two versions of the future Russian electric vehicles planned for release by ONEXIM group under the project "City Car" appeared on the Internet. The first test prototypes should be revealed in December. A full-scale production could begin in 2012.

The car will be almost entirely Russian - localization of 80%. The market value of the car is promised to be kept under 450 thousand rubles, its range is 400 km, the maximum speed is limited to 120 km / h and operating costs are equivalent to conventional cars with fuel consumption of 3-4 l/100 km. China and America remain major world markets. The Chinese market in September has become the most successful one as it was able to sell 1.21 million cars. Since the beginning of this year, an increase of 22% has been recorded. Over this period 8.63 million vehicles have been sold.

With this index, China once again became the world's largest market for new car sales. However, the United States is very close - only 10,000 fewer cars have been sold there. In September, the U.S. has sold over 956 thousand new cars - an increase of 28%.

The experts record an increase in sales in India - in September it was 28%. A slight increase in demand was registered in Japan. Since the beginning of the year it has increased by 20% to 3.5 million vehicles. Yet, in September the number of registered new vehicles in this country fell by 3%. Brazil saw a decline in September by 2%. However, since the beginning of the year the country registered an increase of 7%, and has sold nearly 2.4 million cars.

Car sales will grow primarily due to the BRIC countries, analysts of The Boston Consulting Group say. According to their forecast, by 2020 the market will grow by almost 50% to 90 million. The BRIC countries will provide an increase of 16 million cars by 2020.

According to the forecast of BCG, in 2009-2015 in Russia and India the sales will grow an average of more than 11% per year. In China, the growth rates will not be very high, approximately 7% per year. By 2020, Russia will account for 4% of the world market and approximately 4 million vehicles a year. The BRIC countries will provide 38% of all car sales in the world, and the U.S., Japan and the EU will have 44% of sales.

Boris Yaremenko

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Author`s name Dmitry Sudakov