Page 129 - RusRPTMay21

9.1.2 Automotive sector news
Russia's sales of cars and light commercial vehicles (LCVs) in March 2021 declined 6% year on year to 0.15mn units, according to the latest data from the Association of European Businesses (AEB). Overall 1Q21 sales were down 3% y/y to 0.39mn vehicles.
This confirms the trend of falling automotive sales, short supply of new cars and rising prices previously reported by bne IntelliNews.
Purchase interest slightly decreases while prices increase, and in some cases there is still a deficit in offering certain models, the AEB report for March noted, adding that the mass segment is slowing down most of all.
AEB believes, however, that due to the base effect the readings will improve in the short term. "It is obvious that the next couple of months will remedy the situation and the market will demonstrate growth, because we will compare results of the nearest months with the worst ever months in the automobile industry linked with business limitations due to the coronavirus [COVID-19] pandemic," the head of AEB, Thomas Staertzel, commented.
"We think that the March decline was driven by a combination of the relatively high base effect, shortages of some models and the moderation in demand on the back of recent price increases," VTB Capital (VTBC) analysts commented on April 6.
The analysts "continue to expect the market to grow in the low single-digits in 2021".
Russia's largest car maker AvtoVAZ remained the market leader, with a 22% share in 1Q21.
March sales of its flagship Lada brand were up 3% y/y to 33,779 units, while 1Q21 sales increased 5% y/y to 83,908, beating the market. The AvtoVAZ/Renault/Nissan/Mitsubishi alliance controlled 34.5% of the market in 1Q21.
Sollers saw flat sales of its UAZ brand in March, with 2,733 units sold. Meanwhile, UAZ sales declined 23% y/y to 5,615 units in 1Q21. Ford Transit sales (consolidated by Sollers) remained strong: up 23% y/y units in March and up 62% y/y to 3,388 units in 1Q21.
"Despite the solid Ford Transit sales, which are supported by high demand from e-commerce, we remain neutral on Sollers, as we do not see any strong immediate triggers that could drive the stock's re-rating," VTBC commented while maintaining a Hold rating on the name.
129 RUSSIA Country Report May 2021 www.intellinews.com