OREANDA-NEWS. On 17 February 2009 E&Y announced, that 2009 will be an extremely challenging year for the Russian automotive industry. The market may fall by up to 20%, with a number of market players being driven out of business. These are the main conclusions of an annual survey of the automotive industry prepared by Ernst & Young, a global leader in assurance and advisory services.

The survey also shows that, according to year-end results, the market will acquire a completely new competitive landscape. Total market volume will fall by approximately 25-30% in 2009, with the LCV market being the most affected by this downturn. However, despite the expected drop in sales in the short term, the Russian automotive market retains growth prospects for the mid and long term.

The survey lays out the most important trends on the market today and gives an outlook for further development of the industry through 2012. According to the survey data, the following trends are expected on the automotive market in 2009:

Increased market consolidation in Q2 2009, especially in the automotive retail segment

Continued investment in the industry, especially from foreign automotive component manufacturers

Reinforced competitiveness of Russian brands due to weakened ruble and government support

Change in market structure, as foreign brands will be most affected by the deteriorating market conditions.