List of carmakers poisoned by Russia’s toxic market

Like a BRIC into the wall

Like a BRIC into the wall

“Hit by a plunge in the Russian rouble and increased buying incentives in the United States,” (an interesting combination of events, presented by Reuters) Hyundai’s net profit took a 19 percent plunge for the October to December quarter. Will other carmakers meet a similar fate? Check out their exposure to the double toxic Russian market.

Hey, Ford: Now  that's a cheap currency

Hey, Ford: Now that’s a cheap currency

Russia, not too long ago feted as the “R” in the BRICs (which, except for the C, haven’t fared too well anyway) was hit by a multiple whammy: Sanctions took a big bite out of an economy hit very hard by plummeting oil prices. Automakers active in Russia are faced with a car market that contracted 11 percent in 2014. Much worse, what little profits they made in Russia are devalued along with the Russian rouble. In 2014, the Russian currency lost 43.5 percent of its value as capital fled the troubled country.

Brand / Group Auto sales Russia, January-December
% Share Volume
2014 2013 YOY 2014 2013 YoY
AVTOVAZ-RENAULT-NISSAN 30.7 29.6 1.1 764,245 821,404 -7.0%
AVTOVAZ 15.5 16.4 -0.9 387,307 456,309 -15.1%
RENAULT 7.8 7.6 0.2 194,531 210,099 -7.4%
NISSAN 6.5 5.3 1.2 162,010 146,319 10.7%
INFINITI 0.4 0.3 0.1 8,983 8,677 3.5%
DATSUN 0.5 11,414
Hyundai-Kia Group 15.1 13.6 1.5 375,322 379,171 -1.0%
KIA 7.9 7.1 0.8 195,691 198,018 -1.2%
HYUNDA 7.2 6.5 0.7 179,631 181,153 -0.8%
VW Group 10.7 10.8 -0.1 265,482 302,933 -12.4%
VOLKSWAGEN cars 5.1 5.6 -0.5 128,071 156,247 -18.0%
VOLKSWAGEN vans 0.5 0.6 -0.1 12,612 15,915 -20.8%
AUDI 1.4 1.3 0.1 34,014 36,150 -5.9%
SEAT 0.1 0.1 0.0 1,641 3,375 -51.4%
ŠKODA 3.4 3.1 0.3 84,437 87,456 -3.5%
PORSCHE 0.2 0.1 0.1 4,707 3,790 24.2%
GM Group  9.1 11.5 -2.4 227,179 318,412 -28.7%
OPEL 2.6 2.9 -0.3 64,985 81,421 -20.2%
CHEVROLET 4.9 6.3 -1.4 123,175 174,649 -29.5%
CADILLAC 0.1 0.1 0.0 1,324 1,513 -12.5%
DAEWOO 1.5 2.2 -0.7 37,695 60,829 -38.0%
TOYOTA Group     7.3 6.1 1.2 181,103 170,580 6.20%
TOYOTA 6.5 5.6 0.9 161,954 154,812 4.6%
LEXUS 0.8 0.6 0.2 19,149 15,768 21.4%
MITSUBISHI 3.2 2.8 0.4 80,134 78,747 1.8%
GAZ LCV 2.8 3 -0.2 69,388 82,395 -15.8%
FORD 2.6 3.8 -1.2 65,966 106,734 -38.2%
Daimler Group           2.4 1.8 0.6 60,553 49,816 21.6%
MERCEDES-BENZ cars 2.0 1.6 0.4 49,165 44,376 10.8%
MERCEDES-BENZ vans 0.4 0.2 0.2 11,020 5,247 110.0%
smart 0.0 0.0 0.0 368 193 90.7%
MAZDA 2 1.6 0.4 50,716 43,179 17.5%
UAZ 2 1.9 0.1 49,844 51,624 -3.4%
PSA Group     1.7 2.3 -0.6 41,177 62,823 -34.5%
PEUGEOT 0.8 1.2 -0.4 21,102 33,862 -37.7%
CITRO?N 0.8 1.0 -0.2 20,075 28,961 -30.7%
BMW Group      1.5 1.6 -0.1 37,254 44,871 -17.0%
BMW 1.4 1.5 -0.1 35,504 42,071 -15.6%
MINI 0.1 0.1 0.0 1,750 2,800 -37.5%
SSANGYONG 1 1.2 -0.2 25,010 34,055 -26.6%
LIFAN 0.9 1 -0.1 23,619 27,467 -14.0%
JLR Group 0.9 0.8 0.1 22,776 22,740 0.2%
LAND ROVER 0.8 0.8 0.0 21,148 21,030 0.6%
JAGUAR 0.1 0.1 0.0 1,628 1,710 -4.8%
HONDA Group   0.9 0.9 0.0 21,761 25,741 -15.5%
HONDA 0.8 0.9 -0.1 20,655 25,741 -19.8%
ACURA 0.0 1,106
SUZUKI 0.8 1 -0.2 19,931 27,724 -28.1%
GEELY 0.8 1 -0.2 18,828 27,263 -30.9%
CHERY 0.7 0.7 0.0 18,139 19,855 -8.6%
SUBARU 0.7 0.6 0.1 17,557 16,831 4.3%
FCA Group     0.7 0.5 0.2 16,575 13,602 21.9%
FIAT 0.3 0.3 0.0 8,102 8,001 1.3%
CHRYSLER 0.0 0.0 0.0 130 159 -18.2%
JEEP 0.3 0.2 0.1 8,221 5,250 56.6%
DODGE 0.0 0.0 0.0 26 192 -86.5%
ALFA ROMEO 0.0 96
VOLVO                              0.6 0.5 0.1 15,421 15,017 2.7%
GREAT WALL                      0.6 0.7 -0.1 15,005 19,954 -24.8%
FAW                                  0.1 0.2 -0.1 2,164 4,838 -55.3%
CHANGAN                          0 1,144
BAW                                  0 0.1 -0.1 1,082 1,594 -32.1%
HAIMA                               0 0 0.0 1,009 401 151.6%
BRILLIANCE                       0 955
ISUZU                               0 0 0.0 766 213 259.6%
ZAZ                                   0 0.1 -0.1 481 3,260 -85.2%
JAC                                   0 424
TAGAZ                               0 0 0.0 129 371 -65.2%
BOGDAN                            0 0.1 -0.1 92 2,055 -95.5%
LUXGEN                             0 86 62 38.7%
FOTON                              0 0 0.0 63 6 950.0%
IZH                                   0 0 0.0 19 698 -97.3%
BYD                                  0 0 0.0 5 106 -95.3%
VORTEX                             0 0 0.0 0 1,005
Total 100.0 100.0 2,491,404 2,777,547 -10.3%
Source: ASSOCIATION OF EUROPEAN BUSINESSES (AEB)

The Hyundai-Kia group was the second-largest in Russian unit sales in 2014. Seeing its Russian sales erode by only 1 percent in 2014, the group can consider itself lucky. But look what an impact it made.

Hyundai-Kia is dwarfed by the Avtovaz-Renault-Nissan group, born from a recent amalgamation of market leader Avtovaz (Lada) with the Renault-Nissan Alliance. On a group level, sales sunk 7 percent.

Number three on the list of companies exposed to the Russian contamination is the Volkswagen Group. Its sales were down 12.4 percent in 2014.

Next in line is General Motors, and it is so out of luck that one is starting to feel sorry. Chevrolet took a nearly 30 percent dive in 2014. The Russians are taking their car cues from Europe, and seeing Chevrolet pull out of the EU, the Russians likewise fled Chevrolet, or so it seems. The other GM brands did not fare much better, bringing GM’s Russian sales down nearly 29 percent in 2014.

Russia was seen as the savior of Opel, at least on paper: From 201 through 2013, Russia was a part of China, at least in the world of GM. As of January 2014, Russian operations were put “back under the control of its European wing,” as Reuters reported. “This will allow GM Europe to emerge more quickly from the red,” Germany’s motor-mouth Ferdinand Dudenhoeffer said. Ooops. During the 2008/2009 crisis, GM’s Europe business nearly was bought-out by the Russians, and many at GM wish they would have said yes to the deal.

5th-largest Toyota actually saw, wonders of wonders, its Russian sales increase by 6.3 percent in 2014, mainly due to increased Lexus sales, as Russians hurried to convert their anemic roubles into less depreciating auto assets.

Ford is usually quick to blame foreign carmakers that a sinking currency will give them an unfair advantage. You won’t hear the complaints this time.  Ford lost nearly  40% of its Russian sales in 2014, and converted into dollars … let’s not even go there.

A year ago, we predicted that “Renault, Hyundai, GM, and Volkswagen will lose the war in the Ukraine,” and sadly, we were right. When carmakers report their 2014 results in the coming weeks, prepare to hear “Russia” mentioned a few times.

For more on the matter, please peruse the table brought to you by the Association of European Businesses in Russia (AEB). I have edited the table slightly to correct a few oversights, such as uniting Kia with Hyundai, and bringing Porsche and Daewoo under the folds of their respective groups. If you want the original, here it is.