Besuited Western car manufacturing executives flocked to Moscow’s annual car show on Wednesday 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 in Russia,” said Oksana Khartonyuk, marketing manager for Porsche in Russia, as the five-day Moscow International Motor Show opened to the press.
“They want the biggest, the best and the fastest.”
Rolls Royce, the iconic British brand 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 told Reuters. Prices start at $420,000.
“It (Rolls Royce turnover in Russia) is growing and will continue to grow going forward, though the super car has its limits,” he said.
But what has taken BMW by surprise was sales of its 7 Series model, which costs between $76,000 and $145,000.
“The 7 Series has had very strong growth in Russia, by around 30 percent this year. We underestimated demand, though, and could have increased sales by 40 to 50 percent,” he said.
The story is the same across all Western high-end car makers who sent regional chiefs to the exhibition on the outskirts of Moscow.
The motor show opens to the public on Friday.
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 customized chrome and alloy wheels for between 250 euros and 600 euros each in western Europe. Now it wants to expand into Russia, sales manager Maurizio Vettorato 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 wheels a year, but Vettorato estimated that within a few years Russia could be one of its biggest markets and add another 30,000 to 50,000 to sales.