With American S.U.V. sales at an all time low and owners unable to sell them, manufacturers have had to come up with new market. Right now that market is in Russia.
Russia, with a population of over 150 Million people, may not sound like the greatest market, but the fact that less than 20 percent of the population even owns a vehicle, makes it huge rife for potential. According to Pricewaterhousecoopers LLP, Russian bought 1.6 million vehicles in the first six months of the year, a 40 per increase from the first half of 2007. Well, to begin with, gas cost’s more than half as much than in most Western European Markets. Add in the fact that their economy is growing from between 6 and 8 percent annually, partly do to swelling commodity prices on its vast oil reserves, and the countries notoriusly rough roads and winters, and you have a mix ripe with possibilities.
Though Russia’s economy is doing well, housing continues to be very cost prohibitive to a great portion of the population. Not everyone can afford decent housing, and a lot of people have actually invested their money in high end S.U.V.’s to live in.
As with any society that is going through burgeoning growth, Russian consumers have become very brand conscience, and you can be sure that American Auto Manufacturers will be there to make sure that even they, can have a piece of the American Way.
What’s leading this S.U.V. buying revolution?
Russia has been enjoying rising commodity prices of it’s huge oil reserves and this has helped lead to economy growth of between 6 to 8 percent over the last two years. Combined with the fact that Russia has notoriously rough winters (and roads), along with rising consumer consciousness for brand names, the market is ripe for S.U.V.’s.
Right now in Russia, the price of gas is also very low, being more than half the price of most Western Markets. American Auto Manufacturers are also taking into account that less than 20 percent of Russia’s population even owes a vehicle, and that auto sales there are up over 40 percent for the same time last year. The prospect of fitting the remaining 80 percent of Russian consumers in you’re brand must seem pretty enticing.
Be assured that all these factors combined is more than enough to guarantee even our Russian friends, a piece of the American Pie.
As Always, keep up the good fight, and Alter the Eco!
Source: The Wall Street Journal
Image Credit: Much Ado About Nothing under Creative Commons License
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