The 2012 result was in line with our and consensus expectations, while the December data confirmed that the trend of the market slowing down is continuing.
According to our macro team, on an SA basis car sales growth slowed to 0.2% MoM on the back of weaker activity in GAZ’s LCV and UAZ (versus previous month), despite a good performance from the premium segment. The overall picture on car sales underpins our view that the growth in consumer spending is stabilising at low levels and will not rebound soon, as cooling lending and tight fiscal policy drag it down.
In January, car sales are set to shrink sharply due to seasonality, but in YoY terms the reading is likely to show a low single-digit increase, on the favourable base effect. However, sustainable advances in car sales are unlikely over the coming months amid the fragile economic growth in Russia.
Sollers’ sales to the domestic market rose 15% YoY in 2012, but were down 5% YoY in December on an 11% YoY drop in UAZ sales (due to the high base effect). December saw Ford sales (carried out through the Ford Sollers JV) recover, with growth of 7% YoY after two relatively poor months. For the full year, Ford sales rose in line with its latest guidance to 130,809 vehicles (up 11% YoY). While we do not project any growth at standalone Sollers this year, Ford has a good chance of outperforming the market on the back of production ramping up at the JV (that remains the key source of upside for Sollers).
GAZ’s LCV sales rose 4% YoY in December and were flat YoY for 2012, in line with our expectations.
AvtoVAZ’s sales were flat in December, but down 7% YoY.