Page 83 - RusRPTOct19

in March after several months of decline, but the recovery has stalled and sales have failed to gather any momentum.
Russia’s AvtoVAZ, with its Lada brand, remained the market leader with a 21% market share in both August and 8mo19. The company continues to outperform the market, growing 5% y/y in August and 3% y/y in 8mo19. The AvtoVAZ/Renault/Nissan/Mitsubishi Group controlled over 36% of the Russian car and LCV market in January-August.
The crisis in the car market has been a boon for Avtovaz which has seen customers flock back to the Russian carmaker after abandoning it in the boom years for foreign brands. The company made its first profit in a decade last year and is trying to consolidate its position with new models.
Sollers' UAZ brand saw its sales declining 3% y/y in both August and YTD.
“We continue to believe that Sollers' ability to increase its UAZ sales will be fairly limited until the company launches a new model in late 2020,” VTBC said.
The sales of the Ford Transit, which Sollers has consolidated from July, increased 26% y/y to 1,237 units in August (the growth in July-August stood at 15% y/y, to 2,190 units).
“We forecast sales of about 6,000 units of the Transit in 2H19, but the recent trends, were they to be sustained, point to potential upside risks to our projections,” VTBC said.
Among other Russian producers, GAZ’s LCV sales were up 6% y/y in August, but still down 2% y/y in January-August.
Russian car producers and the government are debating the use of RUB300bn ($4.6bn) worth of subsidies in form of the compensation of the so-called "utility excise duty" to local carmakers, Vedomosti and Interfax daily reported citing a meeting of market participants and Deputy Prime Minister Dmitry Kozak. Previous reports suggested that the government could increase the utility excise duty on car assembly by as much as 80%-110% as of January 1 2020. Reportedly the measure is proposed by the Ministry of Industry of Trade to compensate the lowering of import duties in December, and maintain car import barriers at about 30% of total cost. The car utility duty was introduced in 2012, as an indirect compensation for lower import duties under Russia's membership in the World Trade Organisation. Russian car makers and foreign car companies that assemble in Russia have the utility duty compensated by subsidies.
Russian government could increase the utility excise duty on car assembly by as much as 80%-110% as of January 1 2020, Kommersant daily reported on September 11 citing unnamed government sources. Reportedly the measure is proposed by the Ministry of Industry of Trade to compensate the lowering of import duties in December, and maintain car import barriers at about 30% of total cost. The car utility duty was introduced in 2012, as an indirect compensation for lower import duties under Russia's membership in the World Trade Organisation. Foreign car companies that assemble in Russia have duties the utility duty counterbalanced by subsidies. However, even with the number of imported
83 RUSSIA Country Report October 2019 ww.intellinews.com