MOSCOW, July 9 (Reuters) - Russia will overtake Germany to become Europe's largest auto market later this year, three years earlier than forecast, PricewaterhouseCoopers said on Wednesday in a report based on first-half sales and projections.
"Russia is coming from a long way behind and is moving very quickly, as it has for several years, and it continues to accelerate," the report's author, Stanley Root, told Reuters.
"I'm not saying the dollar value is greater than the German market, but it will be the undisputed leader in unit terms by the end of the year," he said.
Last year, PwC forecast Russia would become Europe's biggest car market in 2011, while warning that a potential bad loan crisis in the banking sector and lack of investment in roads and parking space could still hamper Russian car market growth.
"If the current market trend continues through the second half of the year, car sales in Russia will exceed sales in Germany and may reach 3.6-3.8 million," PwC said in the report.
In the first half of 2008, car sales in Russia totalled 1.645 million units, a rise of 41 percent from the same period of 2007, while sales in Germany were 1.63 million cars.
In money terms, sales in Russia soared 64 percent to $33.8 billion from $20.6 billion a year ago. PwC said the average price kept rising partly due to a growing share of relatively expensive new imported cars.
With oil and gas export revenues feeding Russia's economy and boosting disposable incomes, consumer demand has shifted towards more expensive foreign brands from the Ladas produced by the country's largest car maker, AvtoVAZ (AVAZ.MM: Quote, Profile, Research, Stock Buzz).
The car market continues to grow in tandem with the country's strong economic performance, a contrast to the bleak outlook in many western countries, said the author. Continued...
"We're not seeing the kind of tightening of consumer credit that's occurring elsewhere," said Moscow-based Root.
"We don't see signs of any imminent shockwaves reaching Russian shores.
The report showed that new imported car sales rose 54 percent to 785,000 units in the first six months, while sales of foreign brands produced in Russia were up 41 percent at 290,000.
Sales of Russian vehicles such as the Lada rose only 27 percent, to 380,000. Sales of used imported cars also rose by 27 percent to 190,000 units.
Root said that while the German figures do not include imports of second-hand cars, it was not a significant factor distorting the overall picture, as Germany is such a large manufacturer and exporter. (Writing by Maria Kiselyova and Conor Sweeney; Editing by Quentin Bryar and David Cowell)
