2016 was not as bad for the car market as it seemed in the fall / E. Egorov / Vedomosti

December was the best month of the whole of last year, with 145,668 passenger cars and light commercial vehicles sold, said Joerg Schreiber, chairman of the Association of European Businesses (AEB) Automobile Manufacturers Committee. This is 10% more than in November, he added.

Sales in December 2016 were down just 1% compared to the same period a year earlier. The lowest figures this year were in July (excluding January and May), when 109,410 cars were sold, after which sales steadily grew month on month. Overall, the market in 2016 shrank by 11% to 1.43 million cars. This is significantly less than in 2015, when the market fell by 35.7%, according to AEB data. The market is in the process of finally finding the bottom, notes Schreiber.

At the beginning of last year, the AEB predicted a 5% drop in the market in 2016 to 1.53 million cars, but in July revised its forecast to 1.44 million. At the Vedomosti conference in October, Sergey Tselikov, CEO of Avtostat, predicted sales in 2016 of 1.3 million cars, noting that this was “slightly higher than the average expectation for the year.” But in November, sales grew by 0.6% compared to November 2015. Car dealers explained this by the stabilization of the currency market and deferred demand.

In 2017, car sales will grow by 4% to 1.48 million units, according to Schreiber. The market will return to moderate growth for the first time in the last four years, he expects. Sergey Udalov, Executive Director of Avtostat, predicts growth of 5%, since a large deferred demand has already accumulated. Many importers are even more positive and predict an increase in sales of up to 7%, notes Andrey Pavlovich, General Director of Avilon. The main driver of the rise may be that owners who previously extended the period of ownership of the car will be forced to change the car, since the costs of maintaining its technical condition will be high.

It is still not worth talking about a revival of the market; most likely, sales in 2017 will remain at the 2016 level, and in 2018 the market will begin to grow, believes Alexey Potapov, Director of the Department of Retail Sales of New Cars at the Autospetscenter Group of Companies.

Vladimir Popov, president of Favorit Motors, disagrees with this assessment: in his opinion, sales will, on the contrary, decrease by approximately 10% to 1.28 million units. This is due to the fact that people's real incomes for the current year will still not recover, and car prices will continue to rise. According to Popov, they grew by 16% in 2016.

December showed some stabilization of the market, the decline was relatively small, says Udalov. Due to the low base in January last year, it is likely that sales will grow. If before 2013 people used cars for 3-4 years on average, now the period of use of cars has increased to 5-6 years due to savings and uncertainty, Udalov continues. In 2017, these consumers will start changing cars more actively.

Sales growth in January may also continue because dealers need to sell off stock, Pavlovich agrees. Potapov also expects sales growth in January due to deferred demand, since December did not meet expectations.

The car market is coming back to life