Auto Market Is Europe's Biggest in H1

VedomostiA model standing beside a Chevrolet Captiva in a Moscow showroom. The company sold 103,735 cars in the first half.
Russia passed Germany as Europe's biggest auto market in the first half as sales rose 41 percent to 1.65 million cars, swollen by demand for models from U.S. and Asian manufacturers, PricewaterhouseCoopers said Wednesday.

Spending on autos increased 64 percent to a record $33.8 billion, buoyed by $27 billion in sales of foreign makes led by GM's Chevrolet unit and Hyundai, the firm said in a report.

Russia is becoming Europe's top car market faster than forecast as sales fall farther west. Renault CEO Carlos Ghosn said in January that Russia would pass Germany within two years, while Ford's European chief, John Fleming, said in June that it might do so in 2009.

"Sales will carry on growing at this pace for two or three years as rising incomes fuel demand," said Mikhail Pak, an automotive analyst at Metropol. "Government spending on improving transport infrastructure will also be an important factor."

Russian auto sales are likely to reach 3.8 million this year if the present level of growth is sustained, PwC said. German deliveries may total 3.2 million, according to estimates from the country's VDA trade association published July 2.

"Russia may become Europe's biggest market in 2008 after surpassing Germany in the six months," PwC partner Stanley Root said in the report, citing VDA figures showing sales in Europe's biggest economy rose 4 percent to 1.63 million in the half.

Russian car imports jumped 54 percent to 785,000 in the period, almost half of total sales, and purchases of locally made foreign cars rose 41 percent to 290,000. Chevrolet was most popular, with sales reaching 103,735.

Nine of the top 10 overseas carmakers in Russia are U.S. or Asian, the report said. Russia will account for 20 percent of global growth in car sales through 2015.