Auto sales growth returning in Brazil and Russia… green shoots of recovery?
2017 is turning out to be a year of growth for passenger vehicle (PV) markets in Brazil and Russia, marking a shift in direction for the first time in last 5-years. Brazil and Russia, two commodity-driven economies witnessed a strong pick up in PV sales volume over the past 6-months.
The uptrend in commodity cycle helped Russia and Brazil to bounce back from recession in 2017. With the revival in economic activities, PV manufactures in these two countries logged double-digit growth in monthly sales volume (Image 1).
PV sales volume for both Russia and Brazil fell consistently over the past 4-years (Image 2).
In 2017, PV sales volume for Russia grew 11.3% Y-o-Y during Jan-Oct period, in line with the forecast of 10.8% issued by auto industry group AEB. Brazilian sales are expected to surpass the forecast of 7.3% issued by auto industry group ANFAVEA, as YTD sales have grown by 10.1% for Jan-Nov period. ANFAVEA forecasts growth in 2018 to cross 10%.
Renault with 35% market share (including AvtoVAZ and Nissan) in Russia and 8% share in Brazil is likely to benefit most from a recovery in these 2 emerging markets.
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