The market continues to decelerate and we expect a lacklustre performance in the coming months. According to our macro team, on an SA basis car sales advanced only 0.8% MoM (supported by the strong performance of UAZ and GAZ LCV), although this was just a slight rebound from the steep decline in October. Car sales activity remains weak, supporting our view that consumer demand and bank lending activity are cooling. The December figure is unlikely to go lower from the current reading due to the favourable base effect. Such market trends, along with the lack of any obvious near-term triggers, are likely to prevent auto stocks from any strong outperformance in the coming months, in our view.
Nevertheless, we note that Russian companies performed relatively well in November. In particular, Sollers' sales were up 6% YoY (+18% YTD). Ford sales, which are carried out through the 50:50 joint venture with Sollers, also recovered from a 15% YoY decline in October and were flat in November (+11% YTD). GAZ’s LCV sales rose 5% YoY in November (flat YTD). Finally, AvtoVAZ's sales were up 7% YoY on the back of the low base related to the end of the scrappage programme a year ago and the continuing ramp up of new models. Still, the company's sales are down 8% YTD.