"Cash for clunkers" has been doing so well in Russia that there simply are not enough domestically produced cars in the country to meet the government's sales targets.
The Russian version of the popular auto sales stimulus program started in March and has been so popular that it a second phasee will begin next year -- both because it is successfully getting people to buy new cars and because local manufacturers cannot keep up with the new demand. Russian car sales are up 20% this year -- by far the fastest-growing auto market in Europe -- and foreign manufacturers like Volkswagen (VLKAY) are eager to get a piece of the action.
VW has teamed up with Russian lender Sberbank (SBRBF) to make car loans in the country. This is almost certainly the start of an aggressive move into Russia. VW is already very active in China and India, but with a vast untapped market on its doorstep, it seems to be an obvious call. This will be great for the company:
(Sadly SBRBF is extremely thinly traded in ADR form, so you cannot really get exposure to this story that way. And the leading Russian car maker AvtoVAZ is not available in either ADR or in the top holdings of any of the Russia ETFs out there like RSX or RBL.
Disclosure: no position