OREANDA-NEWS. January 27, 2012. Stanley Root, partner and automotive industry leader, PwC Russia, has summarised the results of the year 2011 demonstrated by the Russian and global passenger cars' markets and presented the forecasts for the market development, reported the press-centre of PwC.

Growth of global car production in 2012 is estimated to be around 7% up from 2011. This is due, to a large extent, to growing demand from China and India, paired with recovery in the United States and global growth of demand for premium brands. Europe’s financial problems are likely to cause a decrease in light vehicle production in the EU in 2012.

In 2011, light vehicle sales grew by 40% in unit terms and by 70% in monetary terms as compared to 2010 thanks to growing consumer confidence, government support programmes and the increased availability of car loans.

Thanks to the commissioning of new manufacturing facilities and increased utilisation of existing ones, 2011 became a record year in terms of light vehicle production in Russia. Output reached more than 1.7m vehicles, which is 45% more than in 2010. It is important to note that the increase of foreign brands' output is much higher compared to Russian local brands. Due to aggressive growth in the domestic production of foreign brands, their sales grew by 70% in unit terms and by 98% in monetary terms. Sales of foreign cars manufactured in Russia could grow by up to 11% in 2012.

In 2011, every tenth vehicle in Russia was bought on subsidised credit. Altogether, more than 263 thousand subsidised loans were provided in 2011. In 2012, we expect a rise in car loan rates, especially for those cars that participated in the subsidised credit programme. This will likely have a negative effect on total sales of cars bought on credit.

We expect light vehicle sales not to exceed 2.6m units in 2012. However, if short-term negative factors persist, sales could fall as low as 2.3m units.

In this economy, automotive market players can expect long-term growth but should also be ready to adjust to possible changes.