The rate of decline, although still significant, decelerated from that in August (-26%) and July (-23%), which we attribute to the launch of the 'cash-for-clunkers' programme in September. We note that the programme is gaining momentum, with the number of vehicles sold under it during the first week of October reaching about a half of the number for September as a whole, according to the Ministry of Industry and Trade. This points to the likelihood of further improvements, although the recent depreciation of the rouble creates additional downside risks.
According to the Ministry of Industry and Trade, the total number of vehicles sold under the 'cash-for-clunkers' programme stood at about 24,000 in September. AvtoVAZ was the key beneficiary of the programme with a 65% share in total vehicle sales within the programme in September. This was the key reason behind its outperformance, in our view. In particular, the company's car sales fell 9% YoY in September to 36,513 and were down 17% to 283,802 YTD.
Sollers’ sales (UAZ, SsangYong and Isuzu) fell 21% YoY to 5,732 in September and 24% to 47,981 YTD. UAZ’s sales are benefitting from 'cash-for-clunkers' (-6% in September), while SsangYong sales are suffering from the rouble depreciation (-40% in September). The decline in Ford sales (through a 50:50 JV with Ford) began to slow down, but remained quite dramatic. Ford sales fell 35% in September, compared with the declines of over 50% in each of the four previous months. The drop in Ford sales excluding the troubled Focus was just 6% YoY in September vs. the more than 30% decline in the four preceding months.
GAZ's LCV sales fell 28% YoY to 5,705 in September and 21% to 48,180 units YTD.
We leave our forecast of a 12% market decline in 2014 unchanged at the moment, although the recent depreciation of the Russian rouble creates additional downside risks.