What's happened to the auto markets in Russia and Argentina is terrifying
YURI KADOBNOV/AFP/Getty Images
However, two countries stand out for the collapses that their auto markets have endured.
In 2011, Russia saw 39% growth in auto sales, according to Morgan Stanley. In 2012, that number ebbed, to +11%. Then it went rapidly south, with 2014 witnessing a 13% contraction in sales. Morgan Stanley predicts that 2015 will be worse: -15%. The Russian market then returns to a 5% estimated positive growth rate in 2016 and beyond.
The story is similar in Argentina. In 2011, sales grew by 31% from 2010, but by 2014, growth stood at -24%. Unlike Russia, Argentina's market had regained a solid growth footing in 2013 after a dip in 2012, posting an 11% yearly sales gain. But the country has been lately roiled by a debt crisis. Morgan Stanley expects 2015 to be weak for sales, with an estimated 5% decline before a return to positive territory in 2016.
Russia's auto market collapse can be blamed on political and financial repercussions from the Ukraine crisis. It stands in contrast to Argentina, however, because the South American nation's volatile economy has over the past few decades at least prepared global automakers for the ups and downs.
In Russia, following the financial crisis many car makers saw a tempting market, with the potential for significant, steady sales growth when compared to the mature European market. But in the past year and half, automakers such as Ford and General Motors have taken their lumps in Russia, with GM deciding to leave the market entirely.
The situation in Russia and Argentina is at odds with the overall global auto market, where sales have steadily grown by 4-6% each year since 2011, Morgan Stanley's data shows.
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