Development trends of the Russian automotive market in 2012

The Russian automotive market in 2011 was characterised by strong demand for budget vehicles. This sector is growing in leaps and bounds; in 2010 it accounted for a mere 3% of the automotive market but in 2011 it already made up almost 40% of the market. So it comes as no surprise that more and more car makers are beginning to pay close attention to this segment.

KIA and Chevrolet intend to start manufacturing budget models in Russia. Nissan plans to start making a cheap family vehicle on the AVTOVAZ production site in late 2012 and in addition to that the concern also plans to begin manufacturing a brand new budget car custom designed for the Russian market. Experts estimate that the market of budget cars in Russia will not be saturated before 2014-2015.

A number of large auto makers plan to build car factories in Russia in 2012. For example, according to foreign news outlets, Honda is building a car factory with an annual capacity of 30,000-50,000 vehicles in the Far East. Mazda also intends to build a full-cycle manufacturing facility with an annual capacity of 25-50,000 vehicles in the same region.

The strategic alliance Renault-Nissan plans to get a controlling stake in AVTOVAZ in 2012 (Renault may end up with a 35% stake and Nissan with a 15% stake).

AVTOVAZ has bought IzhAvto. The memorandum for the long term development and modernisation of IzhAvto signed by the Savings Bank, AVTOVAZ and Russian Technologies was signed in late 2010. AVTOVAZ plans to manufacture up to 150,000 low-price Lada Grantas per year (to be retailed at about USD 10,000).