THE MARKET of CARS: BEFORE and AFTER CRISIS 1. on The
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1 2 R.M.Nureev , D.I.Kondratov THE MARKET OF CARS: BEFORE AND AFTER CRISIS QUALIFIER JEL codes: D24, D43, E23, E27, L13. Keywords: the market of cars, world production, market structures, the analysis costs-benefits, state regulation, the forecast, features of the Russian market. THE SUMMARY In article the market of cars before crisis, features of its growth on a boundary of centuries is considered, manufacturers are investigated world production of vehicles on segments and the largest companies. Change of manufacture of cars for last 20 years is shown. Dynamics of structure of the market of cars in Russia in 2001-2008 is analyzed considered, how modern crisis will affect repartition of the world market of cars and the tendency of its development (in countries and price aspects). Authors do the short-term and long-term forecast of development of the Russian market of cars. 1. On the threshold of crisis. The automobile market has nowadays black times. Recession in the industry in world production has appeared unusually deep. It has captured all countries, but most of all Russia. What reasons of a consequence and expected prospects of its development are problems which are widely discussed in the press. And correctly to answer them it is necessary to analyze tendencies of development which we observed in the XXI-st century beginning. Our first article therefore is devoted the situations which have developed in this market on the threshold of crisis. 1.1. The market of cars: features of growth on a boundary of centuries World production of cars last years grew fast enough rates. Since 1995 for 2007 it has increased almost in 1,5 times (fig. 1 see). in bln. 80 73,1 66,6 69,3 70 62,8 58,4 56,3 59,0 60,6 56,3 60 54,4 53,0 50,4 51,9 50 40 30 20 10 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Fig. 1. World production of cars 1995 – 2007 Made on: ASM-HOLDING 1 Rustem M. Nureev- Professor of the State University – Higher School of Economics Russia, Moscow, e-mail: [email protected] 2 Dmitry I. Kondratov – master of economics, Russian Economic Academy named after G. Plekhanov. E-mail: [email protected] 1 Market expansion occurred mainly at the expense of increase of a role of the countries BRICK. The traditional markets of assemblage of cars have shown insignificant enough rates of growth during this period. As to China, India, the Eastern Europe and Russia for them high rates of growth were characteristic. China became the second-large automobile market in the world, having overtaken Germany. As a result the share of America and Europe has considerably decreased (according to 34 % to 28 % and with 35 to 32 %). And on the contrary, a share of Asia and Ocenia in world production of automobile techniques has increased from 31 % to 38 % (fig. 2). The manufacture parity on segments remains stable throughout all six years preceding crisis. The share of cars against growth of manufacture of automobile commercial transport (LCV) and lorries (fig. 3) has slightly decreased only. Fig. 2. World production of automobile techniques on regions, in thousands, 2001-2007 Source: data OICA and RBC The North America lost a share of the automobile market in the world because of reduced sales volumes of a global three of manufacturers (General Motors, Ford and Chrysler Group). The Japanese motorcar giants continued to increase the potential in the conditions of decreasing demand, using comparative advantages of the country: variability of the lineup, economic models for the consumer and a low price level (fig. 4). Fig. 3. World production of vehicles on segments, %, 2001-2007 Source: data OICA and RBC 2 Manufacture of cars acts as the most important segment which defines a situation in automobile branch as a whole. The world production volume in the given area in 2007 has increased by 1,5 % in comparison with 2006, thus the share of cars in universal manufacture of automobile techniques has not changed, remaining at level of 70 %. Fig. 4. The largest companies-manufacturers of vehicles, 2007 Source: data OICA and RBC However in a segment of cars there were rather serious qualitative changes connected with territorial repartition of the market and change of consumer preferences. 14 12 10 8 6 1987 4 2 0 B G any Italy USA India Spain Brazil China USSR Japan France erm Canada G 14 12 10 2007 8 6 4 2 0 GB USA India Spain Brazil China Korea Japan France Mexica Russia 8 Canada Thailand Germany Fig. 5. Change of the market of cars for last 20 years Source: Ernst and Young 3 So, cars of the Asian manufacture got the increasing popularity not only outside of region, but also in it. In 2007 one of the most fast-growing markets China where manufacture has increased by 40 % continued to remain, and the share in manufacture of cars in Asia-Pacific region has made 39,2%. The share of South Korea, one more large Asian market grew also. In 2007 it has reached 5,6% in volume of world production and 19,4 % in volume of manufacture of the countries of Asian-Pacific region. For the last years given country increased an export potential, annually increasing it on 15-20 % a year. The main importers of production were the USA and Europe, then India, China and Russia. If to look at market change for 1987-2007 we will see, that for last 20 years there were some structural changes (fig. 5). If in 1987 on the first place there were United States of America from shares of the market of 12 %, on the second place - Japan (5 %), on the third place - Germany in 2007 instead of Germany on the third place China (fig. 5) has moved. As to the USA their separation from Japan in the market of cars even has a little increased. And even in большей proportions, than their manufacture (fig. 6 see) has increased. 14 12 10 8 6 1987 4 2 0 B G any Italy USA India Spain Brazil China USSR Japan France erm Canada G 14 12 10 2007 8 6 4 2 0 GB USA India Spain Brazil China Korea Japan France Mexica Russia 8 Canada Thailand Germany Fig. 6. Change of manufacture of cars for last 20 years Source: Ernst and Young If 1987 Japan won first place on manufacture of cars in 2007 it has yielded the palm to the USA. In 2007 on the fourth place there was China, and on the fifth - Korea which have pushed aside France and Russia (USSR). If in 2007 in China it has been made more cars, than in France by 2010, according to analysts, India will surpass the Great Britain in this indicator. 4 The countries with the developed economy in process of increase of their technological and personnel potential, and also in connection with wages growth gradually transfer own capacities to the countries of catching up development which on the technical and economic level follow them. 1.2. The Russian market of cars Throughout a number of years Russia becomes more and more appreciable country in the world market. Motor industry - not an exception. Rates of growth of sales here high enough, especially in comparison with stagnation situation in the Western Europe and America. Level of motorization of the population of the Russian Federation much below European, thus real incomes of the population increase every year. It involves all in our country of global car assembly players. Expansion is included in investment plans of all largest manufacturers of cars. They will be followed also by manufacturers of the completing goods who also consider a question on assemblage localization in Russia. Fig. 7. Dynamics of manufacture of automobile techniques to Russia, thousand piece 1990-2007 Source: data OICA and RBC Though the general level of production of automobile techniques of Russia will not reach yet (fig. 7 see) 1990, manufacture of cars became those development a segment which has allowed to come nearer to pre-crisis volumes of manufacture. Dynamics of manufacture of cars in natural expression in Russia was characterized by accurately traced tendency to the lifting, begun in 2002. In 2004 in this segment level of 1990 has been reached. Now the cars made in territory of the Russian Federation, it is accepted to subdivide on two groups differing as inherently (to value for a national economy as a whole), and on rates of growth: - Domestic cars; - The foreign cars collected in territory of the Russian Federation. Dynamics of manufacture of cars is presented in table 1 Table 1 Dynamics of manufacture of cars on territories of the Russian Federation, thousand piece Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Total 986 840 954 969 1022 981 1012 1110 1069 1174 Domestic car 973 830 950 965 1016 970 955 982 912 885 Foreign car 13 10 4 4 6 11 57 128 157 289 Source: Rosstat (http://www.vedomosti.ru/newsline/index.shtml?2007/12/19/524803) 5 Domestic cars. Reduction of number of their large factories letting out became the basic tendency for the last years in the field of manufacture of domestic cars. This number has decreased with 7 in 1995 to 3 (Autovaz, GAS, UAZ) in 2006. The reasons of it at each of them were different: bankruptcy (AZLK), refusal of release of domestic cars in favour of foreign cars (KAMAZ, Izh). Such reduction of number of players, and also reduction of release at factories, has naturally affected figure of the general release.