Auto sales fell by 11% in 2016

Monthly sales have been growing since August, and market participants expect continued growth in 2017.
December was the best month for all of last year: 145,668 cars and light commercial vehicles were sold, the chairman of the Committee of Automakers of the Association of European Businesses (AEB), Joerg Schreiber. This is 10% more than in November, he added.

 ales in December 2016 compared with the same period the previous year decreased by only 1%. The lowest levelsthis year (with the exception of January and May) was in July, when 109,410 cars were sold; after that, the sales were steadily growing month to month. In general, the market declined by 11% in 2016 to 1.43 million vehicles. This is significantly less than in 2015, when the market fell by 35.7%, as follows from the data of AEB. The market is finally finding its bottom, said Schreiber.

Early last year, the AEB predicted 5% fall in the market in 2016 to 1.53 million vehicles, but in July revised its forecast to 1.44 million. The general director of AUTOSTAT, Sergey Tselikov, during the Vedomosti conference in October, predicted sales in 2016 at 1.3 million vehicles, noting that it was "slightly above average expectations for the year." But in November, sales grew by 0.6% compared to November 2015. The dealers attributed this to the stabilization of the currency market and pent-up demand.

In 2017, sales of cars will increase by 4% to 1.48 million vehicles, says Schreiber. The market will return to moderate growth for the first time in four years, he calculates. Executive director of AUTOSTAT, Sergey Udalov, forecasts growth of 5%, due to the already accumulated large pent-up demand. Many importers are even more positive and give projections for the 7% growth, says CEO of AG Avilon, Andrey Pavlovich. The main driver of recovery could be that the owners, who had previously extended the holding period, would be forced to change their cars, as the expenditures on maintaining its technical condition will be high.

There's no point in talking about the market recovery; the sales in 2017 will likely remain at the level of 2016, and in 2018 the market will begin to grow, the director of department of retail sales of new cars of SC Avtospetstsentr, Alexey Potapov, believes.

President of Favorite Motors, Vladimir Popov, disagrees: according to him, the sales, by contrast, will decrease by approximately 10% to 1.28 million units. This is due to the fact that the real incomes of people won't bounce back in the current year, and the prices for cars will continue to grow. During 2016, according to Popov, they rose by 16%.

December showed some stabilization of the market, the decline was relatively small, says Udaltsov. Due to the low base in January last year, it is likely that sales will grow. If prior to 2013 people used cars for an average of 3-4 years, now the term increased to 5-6 years because of the cost-cutting and uncertainty, continues Udaltsov. In 2017, these consumers will be more active in replacing their cars. 

The growth of sales in January could continue because dealers need to sell stocks, agrees Pavlovich. Potapov also expects an increase in sales in January due to pent-up demand, because December fell short of expectations.