Russia car sales jump 80% in February

MOSCOW (Reuters) -- Sales of new cars in Russia surged anew in February, driven by high oil prices boosting economic growth and by state incentive schemes.

The Association of European Businesses (AEB) said sales rose 80 percent year on year to 165,518 units, bringing year-to-date growth to 77 percent.

AvtoVAZ, 25 percent owned by France's Renault and producer of Lada models, was the market leader last month with sales of 37,528 units compared to Nissan's 10,501, Kia's 10,200 and Renault's 9,985. Chevrolet was No. 4 with sales of 9,759.

The AEB said it would review its full year targets after sales data for March. The group said in January it expected a 17 percent rise in 2011 sales and a return to pre-crisis levels in 2012.

"Our consensus view on 2011 remains at 2.24 million passenger cars and LCV but in the light of the strong start to the year we will review this following the March and first quarter results," David Thomas, Chairman of the AEB Automobile Manufacturers Committee, said in a statement.

The AEB added that high oil prices and state loans were supporting the market. "The foundation is there for a very good year provided these fundamentals stay in place," it said in the statement.

Growth market

Russia has re-emerged as a target growth market for the world's biggest carmakers as a collapse in sales during the financial crisis gave way to a growth pattern that some believe will see the market double to 4 million units.


The government recently introduced new guidelines for overseas manufacturers looking to boost production in Russia -- setting a goal of at least 300,000 cars a year by 2015 as it seeks to modernize its industry and maximise capacity.

For drivers, the state introduced a scrappage scheme to encourage car owners to trade in their old models for new vehicles. The program, which began almost exactly a year ago, provided an immediate boost to sales.

AvtoVAZ was the biggest beneficiary and enjoyed a 48 percent boost to 2010 sales and an 86 percent jump in February.

Last month the Boston Consulting Group said that the Russian car market may become the world's sixth-largest by 2020, up from 10th currently, selling 4 million cars a year. It added that Russia may overtake Germany by 2018 as the largest market for passenger cars and light commercial vehicles in Europe.