Russia's New Money Is Chasing after Top Western Luxury Car Brands
Byline: By James Kilner and John Duckers
Western car manufacturing executives have been flocking to Moscow's annual car show to woo newly-rich Russians who have spurred a boom in luxury sales.
Russia is the world's second-largest oil exporter and this year's record high prices have swelled the economy and fuelled Muscovites' taste for conspicuous consumption.
"It's definitely new money buying our cars," said Oksana Khartonyuk, marketing manager for Porsche in Russia, as the five-day Moscow International Motor Show opened.
Rolls-Royce, now owned by German manufacturer BMW, will sell 30 cars in Russia this year out of about 800 worldwide, BMW's Russia chief Cristian Kremer said.
Prices start at pounds 222,000.
"It (Rolls-Royce turnover in Russia) is growing and will continue to grow going forward," he said.
But what has taken BMW by surprise was sales of its 7 Series model, which costs between pounds 40,000 and pounds 76,000.
"The 7 Series has had very strong growth in Russia, by around 30 per cent this year," said Mr Khartonyuk. "We underestimated demand, though, and could have increased sales by 40 to 50 per cent."
The story is the same across all Western high-end car makers who sent regional chiefs to the exhibition on the outskirts of the capital.
The motor show opens to the public today.
Sweden's Volvo said 2006 sales had already surpassed last year's total, while Porsche estimated it sold about 1,000 cars in Russia during the 12 months to the end of July, compared with under 400 a year earlier.
Russians' spending power, concentrated in Moscow and St Petersburg, is attracting newcomers, too.
Arcasting is a privately owned Italian wheel manufacturer which sells customised chrome and alloy wheels for between pounds 169 and pounds 405 each in western Europe. Now it wants to expand into Russia, sales manager Maurizio Vet-torato said.
"This is the place to be right now if you are selling luxury goods. Russians have money, they want to spend, and they want to spend on luxury goods," he said.
Arcasting sells around 150,000 …
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Russia's New Money Is Chasing after Top Western Luxury Car Brands. Contributors: Not available. Newspaper title: The Birmingham Post (England). Publication date: September 1, 2006. Page number: 29. © 2009 Birmingham Post & Mail Ltd. COPYRIGHT 2006 Gale Group.