The Russian car market is booming, but U.S. traders often have trouble figuring out how to get exposure to this story. Wonder no more.
Just 10 global manufacturers sold about 50% of all passenger cars that Russians have bought so far this year, and their share is growing at an annualized rate of about 13.5%. As a result, a basket of these stocks — almost all of which trade in some form in the United States — should be relatively easy to put together as a proxy for the fragmented Russian car market.
Naturally, these are world-spanning manufacturers based in the developed world, so their performance will not exactly reflect developments in Russia. But since Russians purchased 56% more cars so far this year than they did in the equivalent year-ago period, this is clearly one of the areas where the big names are finding room to grow.
In order of current market share, Chevrolet leads the way for parent GM, with 6% of all new cars sold in Russia so far this year. Renault (OTC:RNSDF), Hyundai (OTC:HYMTF) and Kia (OTC:KIMTF) follow, each with about 5.9% of the new sales market.
In the third tier, Nissan (OTCPK:NSANY), Toyota (NYSE:TM), Ford (NYSE:F), Volkswagen (OTCPK:VLKAY) and Daewoo all captured 3.6% to 4.5% of Russia’s new car buyers, and Mitsubishi (OTCPK:MMTOF) rounds out the list with a 2.8% share.
Mitsubishi may have the smallest share of existing car sales in this basket, but it is growing the fastest off that low base. The company’s sales in Russia surged 134% over the last year. Nissan and Volkswagen — the latter boosted by its Czech Republic-based Skoda affiliate — also doubled their sales, while Hyundai and Toyota both came close with 92% and 90% more signings, respectively. Chevrolet and Daewoo lagged the pack on growth, with Ford bringing up the rear with only 35% more sales so far this year.
As for the home field advantage, domestic producer AvtoVAZ (OTC:AVTZF) is still the overall leader, selling 23% of all new cars that Russians have bought in the last six months. But that share has dropped from 28% last year as increased competition cut into its ability to lure novelty-seeking middle-class Russians onto its lots.
AvtoVAZ will not be around much longer as an independent entity, in any event. Strategic allies Renault and Nissan have fine-tuned their plans to divide control of the company and now expect to own 50% plus one share of AvtoVAZ by the end of the year.