January 22, 2013 / 9:16 AM / 5 years ago

UPDATE 2-Russian car sales seen rising 5 pct in 2013-PwC

* Stark contrast to rest of Europe

* Russia market steadying after rapid expansion (Adds comment)

MOSCOW, Jan 22 (Reuters) - Russian car sales are likely to increase by 5 percent in 2013, PricewaterhouseCoopers forecast on Tuesday, a slowdown from the previous year but a stark contrast to recession-bound Europe where car sales slid to a 17-year low.

PwC expects car sales for 2013 to rise to around 2.9 million. That would be up from 2.76 million cars in 2012 which was a 10 percent increase from the previous year.

“We expect next year we will see modest, measured growth,” said Stanley Root, PwC’s automotive industry leader for Russia, adding that the market was showing signs of steadying after a period of significant expansion.

The accountancy firm sees growth slowing after next year to 3 percent annually from 2014 to 2017, eventually reaching zero growth by 2025 by which time it estimates the market will have reached its maximum level of annual sales of 3.7 million.

It predicts that growth in 2013 will be largely driven by foreign car brands produced in Russia, which are slated to see a 9 percent rise to 1.33 million sales in 2013.

Imports of foreign brands are expected to rise 3 percent to 990,000, while Russian car brand sales will be flat at 580,000 units.

Root commented that a new “recycling fee” imposed only on imported vehicles is expected to slow growth in the sector.

He said that the development of the car scrappage industry was “key” to future growth in Russia, where owners keep their cars on the road for some 16 years, much longer than the European average.

Data earlier in January from the Association of European Businesses showed Russian car sales grew 10.6 percent to a record 2.935 million in 2012 and were expected to be 2.95 million in 2013.

In Europe, new car registrations fell 8.2 percent to 12.05 million vehicles in 2012, the lowest level since 1995, recent figures by the European automotive industry association ACEA showed. (Reporting by Sonia Elks and Gleb Stolyarov; Writing by Megan Davies; Editing by Douglas Busvine and David Cowell)

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