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    LADA pavilion at the 2016 Moscow International Automobile Salon at Crocus Expo in Moscow. AvtoVaz has significantly expanded its lineup of contemporary car designs in recent years.

    Pedal to the Metal: Russian Car Sales Jump by Double Digits for Month of May

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    Car sales in Russia are showing impressive growth. Sales for the month of May were up 14.7% compared to May 2016, reaching 124,900 vehicles, according to the Association of European Businesses (AEB).

    May became the third consecutive month seeing a respectable growth in sales, with 129,400 cars sold in April (a growth of 6.9%) and 137,800 cars in March (9.4% growth). The first five months of 2017 saw an overall surge by 5% compared to the same period last year, with 577,400 cars sold.

    According to AEB, almost all brands, with the exception of UAZ, Lexus, Audi and Datsun, enjoyed strong growth. AEB representatives told Russian media that the figures indicate an acceleration of the automotive market's recovery. 

    Russian automotive giant AvtoVAZ led growth, enjoying 22% growth for the month of May and selling about 25,000 cars. KIA, the leader among foreign brands, grew sales by 26%, to 15,100 units. Hyundai, Toyota, Renault and Volkswagen also enjoyed double digit growth (of 13%, 15%, 22% and 28%, respectively).

    The Lada Center South-West car dealership in St. Petersburg begins sales of the Lada Xray compact crossover
    © Sputnik / Igor Russak
    The Lada Center South-West car dealership in St. Petersburg begins sales of the Lada Xray compact crossover

    Not all brands enjoyed growth last month, however, with Lexus sales dropping 20% to just 1,700 cars sold, and Audi sales falling 14% to 1,500 units. Other luxury car brands enjoyed growth, but it was more modest than growth in the budget and mid-range vehicles. Mercedes and BMW, for example, grew their sales by 8% and 7%, respectively.

    According to Russian business news portal Expert.ru, key reasons for growth include pent-up demand, and the low base measurement from last year's figures.

    A stronger ruble has also played a role for sales of foreign brands, Expert.ru noted. Finally, lower interest rates and the general stabilization of the Russian economy, leading to increased consumer confidence for major purchases, have all played a role in growth.

    Sergei Tselikov, the director of the Autostat analytical agency, told Expert.ru that growth has caught some dealerships off guard, with some showrooms running out of vehicles. "I think that the trend for market growth will continue, and turn into a stable long-term trend," Tselikov said.

    Observers estimate that annual growth will comprise 5-15%. Government support measures, comprising 7.5 billion rubles in budget subsidies, are expected to provide additional momentum. The measures include discounts for families purchasing their first vehicle, assistance for family cars, vehicles for farmers, etc.


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