While the January headline number looks positive compared with the growth of just 1% in December and 0% in November, we note that January is not that representative due to seasonality and various promotional actions. We think there will be a better view of the trend by the end of 1Q13. Moreover, according to our macro team, on an SA basis car sales growth slowed to almost zero on the back of weaker activity at Lada and in GAZ’s LCVs, as well as some premium segments, such as BMW and Mercedes-Benz (vs. previous month). Hence, the overall picture on car sales remains muted, which supports our view that demand is constrained amid lower wages growth and cooling lending. Meanwhile, lower MoM SA growth coincides with the data on non-CIS car imports (which saw volumes contract YoY in January).
In February, we see a fair chance of car sales declining as the favourable base effect in January is set to change into an unfavourable one. We also expect a flattish performance from the market in the coming months.