MOSCOW–Carmakers descend on Moscow this week to show off new models to a Russian public whose soaring incomes are fast making Russia the largest car market in Europe.
The Moscow International Auto Salon will witness eight debuts, including new models from BMW, Audi, Lexus and Renault, and a trend away from budget cars toward the more expensive machines that Russians increasingly can afford.
"If a few years ago we saw the $10,000 level as the most popular, people now are buying cars for $19,000 and over," said Ivan Bolchev of Ernst & Young in Moscow. "Growth in disposable income is pushing this up, and that's supported by the growth in the economy, thanks largely of course to oil exports."
Sales of foreign car brands in Russia rose 46 per cent in January through July to 1,256,869 units, compared with the same period of 2007, according to figures released on Monday by the Association of European Businesses.
Some foreign carmakers are targeting up to 50 per cent sales gains again this year, though volumes are already high and the pace of growth is becoming difficult to maintain.
Ford sold 175,000 cars here last year and is targeting 200,000 in 2008 and General Motors has said it hopes to sell 400,000 cars this year, up from previous estimates of 300,000.
"And the market is far from saturated. We're seeing growth in every segment, including the supercars," Bolchev said.
Mazda will debut its new concept car, the Kazamai, a futuristic coupe whose name means 'swirling crosswinds' in Japanese, while Renault will bring out its Symbol hatchback.
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Growth in Russia's banking system has supported the expansion of the auto sector, analysts say, as Russians feel secure enough to borrow against incomes which have grown at a steady clip of around 10 per cent per year for almost a decade.
