Eastern European & Central Asian countries to transform into new car markets, finds research
The firm’s data shows that light vehicle sales in these markets will exceed one million by 2021. It adds that Kazakhstan, Uzbekistan, Ukraine and Azerbaijan will remain the top markets for automotive investment, contributing an estimated 93 percent to regional LV sales in 2021.
“Economic growth and sound governmental policies will aid the transition of the -Stan and -Jan region from a used car market to a new car market,” said Frost & Sullivan automotive and transportation consulting analyst Anna Ozdelen. “Significant state support will attract investments in LV production as well as local auto component manufacturing, thus steering the region’s automotive industry forward.”
The firm added that unfortunately, sales and production growth is likely to slow down over the next couple of years. Falling oil prices and depreciation of the Russian rouble may result in currency devaluation and decrease the purchasing power of the public, thereby slowing down regional LV sales and production. Manufacturing OEMs are expected to respond by increasing the levels of manufacturing localisation.
Locally manufactured vehicles will be more affordable and will experience lower currency-related price fluctuations. Kazakhstan, in particular, will evolve into a production hub as overall localisation in the country is set to rise from 30 percent to 50% by 2018.
“Foreign OEMs will increasingly rely on joint ventures with state organisations to penetrate regional markets,” noted Ms Ozdelen. “As the regional economy recovers, higher incomes, burgeoning population, low vehicle density as well as the need to replace old vehicle fleets will drive further organic growth in the -Stan and -Jan automotive industry.”
For complimentary access to more information on this research, please visit: http://corpcom.frost.com/forms/EU_PR_KFeick_MA85-18_08April15.
Leave a comment