OREANDA-NEWS. 27 February 2008. Moscow. Russia is predicted to be the #1 car market in Europe in 2008 with 3.3mn cars being sold, according to Renaissance Capital's automotive and transport research team. However, even this does not limit further growth - selling 6mn cars in 2015 would give Russia 398 cars per 1000 people, or just 20% above the level in Poland in 2006.

Eduard Faritov, Transport Analyst at Renaissance Capital, said: "We are observing incredible change in demand with growing wealth: in 2003, 85% of cars sold were below $10,000 mark, in 2007 that was down to 26%. Furthermore, the market for cars priced above $20,000 is bigger in dollar terms than the sub-$20,000 segment."

In 2007 the market grew 34% to 2.8mn cars and Renaissance's analysts expect another 20% in 2008. The major growth drivers are continued growth in disposable income (11% per year since 2000), increased availability of loans, strong substitution demand and very low penetration of cars per '000 people (188 vs 330 in Poland, and 500-600 in Western Europe).

International players are also contributing to growth of the Russian car market. Volkswagen, Peugeot Citroen, Nissan, Mitsubishi, Suzuki and Hyundai announced plans to grow their assembly plants in Russia; GM and Ford have been producing cars in Russia since 2002 and Toyota started production last year.