Russia leads Europe in car sales
Drivers around the world are feeling the pinch as the cost of petrol continues to rise. Despite this, Russia's auto market is going from strength to strength and is now Europe's largest, having overtaken Germany in terms of unit sales.
As the cost of fuel rises across the globe, many vehicle markets are flagging. But the Russian market is experiencing its sixth consecutive year of growth.
Ivan Bonchev from Ernst & Young says the high cost of oil is helping Russian car sales.
“So far we haven't really seen any direct effect firstly on the numbers of cars being bought and secondly in the segmentation or classification of cars being bought. Russia in general has been benefiting from the higher oil prices from an economic perspective and this is also valued in the auto industry,” he said.
Last year the market was estimated to be worth $US 54 billion. PriceWaterhouseCoopers says its value in the first half of 2008 alone is $US 34 billion.
As Russia's car market continues to grow, congestion on the country’s roads gets worse and this is prompting calls for much-needed road building.
Analysts say investment is crucial and that the government is allocating more funds to this purpose.
But Stanley Root from PriceWaterhouseCoopers says easing congestion isn’t simply a matter of laying more tarmac.
“There's lots of investment still to be put into traffic management within cities. It's not just a question of building roads. It's a question of managing the flow of traffic, managing the flow at intersections. It's a question of managing and investing in traffic management,” he said.
Projections of continued growth are revealed in research being conducted by Ernst & Young and PriceWaterhouse. Russian drivers and car dealers seem likely to keep their feet to the floor for some time yet.