[European Atlas] Overview of Russia

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Supported by a spectacular growth in sales of new vehicles, the Russian car parc continues to grow but also to age. After several dark years, the fourth largest market in Europe was up again in 2017 with 1.59 million registrations and has reached 1.62 million in the first 11 months of 2018, an increase of 13.7%. Lada (a subsidiary of Renault) leads the way with around 17% market share. Next comes Kia and Hyundai ahead of Renault and Volkswagen. If the market is far from its record of 2012 (nearly three million new vehicles sold), it is moving closer. Nevertheless, some manufacturers such as Opel and General Motors have withdrawn from this market that is difficult to forecast. Used car business is doing well too. From January to November 2018, it grew by 2.7%, and should end the year at five million transactions, according to the Avtostat agency. In detail, 89% of used vehicles sold are over three years old and 28% are in the 4 to 6-year-old segment, according to Denis Dolmatov, CEO of the CarPrice online sales site, as reported by the Kommersant newspaper. For 2019, a slowdown in the growth of sales of new vehicles is expected, although still around 6%, while used car sales should still increase between 20 to 25%.

Despite the uncertainties of the national economy, the context is favourable for the after-sales sector. Alongside local companies who continue their restructuring, the European independent aftermarket groups are beginning to return good results. And others are now appearing on this promising market. For example, the leading multi-brand Euro Repar Car Service opened in Moscow last April. For the moment, Eurorepar’s (PSA Aftermarket subsidiary) spare parts range covers the needs of 65% of the Russian parc, excluding local brands. The company aims to open 500 garages in the next five years. If it manages to attract many independent repairers into its fold, not only would it shape a significant after-sales market share, but it would be the largest network.
Nicolas Girault

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In a country where the sale of parts on the internet is very strong, the French chain is looking to join the party. Norauto arrived in the country seven years ago, it has two auto centres in the Moscow suburbs. Its Klimovsk and Noginsk centers will for the moment be the only two delivery points, according to Dvijok. But Norauto says that it is looking to extend its service to the whole of the Russian Federation. "According to our analysis, more than 70% of Russians prefer to buy auto parts online" said Elena Morozova, director of the brand in Russia. If it manages to create a network of delivery points, internet would be the springboard to expand its activities in the region. It will also face pure-players, already firmly established, such as EvroAvto, Exist.ru, Emex, Sigma Parts and Karvil’shop. Founded in France in 1970, Norauto launched internationally in 1986 and has 656 car centres in nine countries.