* Increasing interest rates, consumer uncertainty weighing
in on car sales
* Analysts predict largely flat growth or 3-4 percent in
* Return to high growth in the sector not predicted until
By Sonia Elks
MOSCOW, Dec 10 Russian car sales in November
were flat for the first time in more than two years as Russians
put off spending following a slowdown in the country's economy.
Western car makers such as General Motors, Ford
, Renault and Fiat have invested heavily
in Russia in the hope a growing middle class will increase its
spending, but a slowing economy and rising interest rates has
caused would-be buyers to pull back, analysts said.
A total of 240,322 vehicles were sold in November, up 0.4
percent from a year ago, a slowdown from the previous month when
sales rose an annualised 5 percent, the Association of European
Businesses (AEB) said on Monday.
Industry analysts predict car sales figures could remain
flat until 2015.
"For the first time in well over two years the Russian car
market is not growing but just holding the sales volume achieved
in the same period one year ago," said Joerg Schreiber, Chairman
of the AEB Automobile Manufacturers Committee.
"The present situation in dealer showrooms across the
country is such that we do not expect a quick return to growth
in the coming months."
Schreiber said customer activity and purchase appetite in
recent months had been weaker than last year.
Sales over the first 11 months of the year were 2.68 million
cars, up 12 percent on a year ago, after a 13 percent rate in
However, the AEB said cumulative growth figures will push
closing figures for Russian sales for 2012 to 2.9 million,
meeting the AEB's expectations for the year.
The Russian car market is expected to overtake Germany as
Europe's biggest some time this decade.
Analysts said the slowdown was not a surprise, as the
Russian economy has been slowing.
Russia's GDP growth slowed to 2.9 per cent in the third
quarter from 4.9 per cent in the second quarter
while auto loan interest rates are typically double digit, often
around 15 per cent - and can reach over 20 per cent.
Carol Thomas, central and eastern European analyst at auto
forecasting group LMC Automotive, predicted that the car market
would see only modest growth of around 3-3.5 percent annually
until 2015, when it could reach 6 percent.
"We have expected a much slower rate of growth over the next
year, but it all very much depends what happens in the euro zone
and the rest of the world," Thomas said.
However, she said that the end of 2011 and early 2012 had
seen "exceptional growth" that was "probably not sustainable".
"It is not as bad as it looks - it is more a flattening of
growth than a real slowdown," Thomas said.
Vladimir Bespalov, an analyst at VTB Capital, predicted that
car sales growth is only likely to gain a few percentage points
of up to 4 percent in 2013.
"In the coming months the performance will be broadly flat,
it could be zero, it could be minus something, but basically
flat," Bespalov said.
"When you see the economy is slowing down and consumer
confidence is declining, (durable goods) are affected most,
because these are goods that people can buy later. They can
always postpone buying a car or a house - especially when the
situation is not that stable."