By 2014, Russia to Displace Germany as the Biggest Auto Market in Europe

From Bloomberg:

“I need a respectable car to visit clients and travel outside the city,” said the 41-year-old bank executive from the St. Petersburg area. “I earn enough money to do it with ultimate comfort on bad Russian roads.”

Skibar’s shift upmarket is a reflection of the growing class of wealthy consumers in the former communist country. Fueled by an economy based on Russia’s abundant natural resources, the number of households able to afford luxury goods is forecast to rise to 13 million by 2025 from 7 million in 2010, according to consulting company Capgemini.

Those growth prospects are prompting high-end carmakers to expand their presence in the country. Volkswagen AG (VOW)’s Porsche plans to double the number of dealers to 36 over the next six years. Audi is adding showrooms as it targets 30,000 car deliveries this year, double its sales from 2009. Bayerische Motoren Werke AG (BMW) will add about 20 outlets by 2018, a third more than today.

At the Moscow International Automobile Salon, which opens tomorrow and features more than double the exhibition space from the last show in 2010, BMW will introduce an updated version of its top-of-the-line 7-Series sedan. Daimler AG (DAI)’s Mercedes-Benz plans to present a high-performance AMG version of the GL SUV, and Porsche will show the 420-horsepower GTS variant of the Cayenne SUV.

$75 Billion Market

Russia is poised to surpass Germany as Europe’s largest auto market by 2014, with sales rising to 3.4 million vehicles, according to the Russian Industry Ministry. As more buyers choose upscale cars, total revenues for automakers will increase 19 percent to $75 billion this year, outpacing the 10 percent gain in vehicle sales, according to Russian market researcher Autostat.

Lada (AVAZ), Russia’s dominant brand, has been largely left out of the move upscale. The only domestic carmaker among the country’s 10 top-selling nameplates, Lada offers mostly low-end cars such as the Kalina compact and the Niva, a boxy 4X4 that dates from the Leonid Brezhnev era. Lada’s market share fell to 18 percent in the first half from 24 percent a year earlier.

Renault SA (RNO), the No. 2 brand in Russia in the first half, and its alliance partner Nissan Motor Co. (7201), agreed in May to raise their stake in Lada’s parent, OAO AvtoVAZ to 74.5 percent from 25 percent today. The group is aiming for combined market share of 40 percent by 2015 from 33 percent last year, though Lada will anchor the lower end of the lineup while more expensive cars will bear the foreign nameplates.

Growth Potential

BMW plans to open a new training center for employees and dealers in Russia next year and intends to expand its network of BMW and Mini outlets to 80 from 61 by 2018. The carmaker’s Rolls-Royce brand opened a second dealership in Moscow in July, making the Russian capital the second city, after New York, with more than one showroom.

“We’re continuing to invest in Russia because we believe in the Russian luxury market’s future growth potential,” said Ian Robertson, who heads sales for BMW.

Volkswagen is looking to catch up. Its Porsche sports-car brand is drumming up interest with a road show in Russia to encourage test drives. Bentley, the German automaker’s ultra-luxury nameplate, is featuring the Continental GT Speed, its fastest model ever, at the Moscow auto exhibition.

Biggest Potential

“Russia offers the biggest growth potential for the luxury-car segment worldwide,” said Jan-Henrik Lafrentz, Bentley’s finance chief. He expects the brand to double its sales there “in the near future” as it adds showrooms.

Nissan is also stepping up its high-end offerings in Russia. This summer, the Japanese carmaker began assembling the Infiniti FX SUV at its St. Petersburg factory, where it also makes the Nissan Murano SUV.

“The facility will focus on popular premium models with the highest profit margins,” said Dmitry Mikhailov, the plant’s director.

The expansion in Russia marks a sharp contrast to the European Union, where car sales are expected to decline 7 percent this year to the lowest level since 1995, according to the auto-industry association ACEA. That’s making a strong presence in Russia more critical for high-end carmakers to remain competitive.

Europe Offset

“Russia is starting to close the gap for us to Germany and the U.K. volume-wise,” said Doug Speck, sales chief for Volvo Car Corp. “We’ve taken the forecast for Russia up three times this year” and are now targeting sales of more than 20,000 cars there, at least 18 percent more than 2011.

The brand’s sales surged 50 percent in Russia through June, compared with an 8.2 percent slump in western Europe, according to data from industry associations.

The Russian boom is creating opportunities for dealers like Evgeny Voitenkov. The president of St. Petersburg-based Olymp Group, one of the oldest official Mercedes-Benz dealers in Russia, added Porsche to his portfolio three years ago after seeing that demand for high-end cars remained stable even when the economy contracted.

“The number of rich people is growing,” Voitenkov said.“Luxury cars sales will have a bright future in Russia.”

A New Cup Holder for German Cars -- another contribution from Ed!

When automobile reviewers say negative things about German cars they often comment on the lack of sufficient cup holders.  BMW has now offered as an option a "big gulp" cup holder (see attached photo).  Heavy duty shocks installed on the passenger side of the car come with this option.  But, advice to all............never drink and drive   This option is not available in the states of Alabama or Georgia as it is standard equipment.  Mercedes, Audi, and Porsche have so far declined to offer this option on their vehicles

A VISIT TO THE CHRYSLER AUTOMOTIVE MUSEUM, AUBURN HILLS, MI -- a contribution from Ed Garten

Airflow Prototype

                                                                    MoPar at its best 

                                                                Turbine car from the 1960s 

Visitors to the Chrysler Museum in Auburn Hills, Michigan, will find a fairly decent look at Chrysler's long and intriguing history.  I spent a few hours there a couple of weeks ago and, frankly, all you will need is a couple of hours as this is not a huge place nor are there as many cars or exhibits on display than I'd imagined there would be.

When one visits the museum one will meet the many faces associated with the Chrysler heritage and the brilliant engineering, marketing, and design contributions (especially those of Virgil Exner) that many individuals have made to the automotive industry.  Visitors will explore the history of the Chrysler, Jeep_® and Dodge brands as well as such predecessor marques like DeSoto and Plymouth and those companies that were woven into Chrysler and now, of course, abandoned, like Hudson, Nash, and Willys-Overland.

Within minutes of entering the museum one is struck by its openness what with cars displayed in attractive environments, well lit to showcase their aesthetic beauty.  To some visitors the museum may look a bit bare compared to other places where, sadly, cars are much too crowded together.

What struck this visitor was the range of interesting artifacts available for close inspection -- from a World War II Chrysler-designed air raid siren to a "Twin-H" early 50s Hudson straight-six engine to a nice display of the "ladies accessories" that came with the famous 1955 Dodge La Femme.  And of course one could not miss the Chrysler Turbine with exhibit with an actual turbine engine that could be closely inspected.

While Chrysler's heritage has been noted at points for its luxury models, Imperials were, sadly, underrepresented, although the prime example, a 1957 Imperial Crown Southhampton, is very nice. There was one Airflow on display as well as a prototype of the 1932 Trifon that, the next year, became the Airflow.  Let's just say that the ugliness of the Trifon is only bettered by the late Pontiac Aztec. 

Other Forward Look cars (my favorite era actually) on display included a 1956 Dodge Custom Royal Lancer hardtop, a 1957 300C, a 1957 Fury, and a rare 1957 Dodge Sweptside pickup.  I just loved the fact that the Custom Royal had an after-market record player installed under the dash. Also on display was an Exner-inspired Chrysler Ghia.  Interestly, the C-pillar and rear fender rump of this showcar closely echos the same features found on the later Volkswagen Karmann-Ghia.

Color was in full array in the Museum what with some great examples of tri-tones from the 1950s and, surprisingly, a few examples from both AMC and Chrysler of late 60s and early 70s purple and lime colored autos.

Other great interactive displays included an alternator-vs.-generator comparison using a 1960 Valiant grill and headlights as part of the prop, a dashboard where one could push buttons on a Dodge push-buttom automatic tranny selector, and an example of Chrysler's "swing-away" front bucket seats.  This brought back fond memories since I owned a 1959 Plymouth Fury with swing-away seats while in college.  On a date with an ugly girl I let her off at her dorm and, like a gentleman, went around and opened the passenger door for her.  Then I told her to push the little lever on the side of the seat and, wow, the seat turned around almost ejecting her (smile).  Let's just say he was less than impressed.

Yes, there was a nod to "Lee" and the importance of his efforts to turn the company around back during the "first auto bailout."  On display was a nice early Plymouth Minivan but, sadly, there was no Horizon, Omni, or Reliant on show.  Hey, how about a concours example of a Lebaron convertible?

Many car museums these days seem to have reproductions of pioneers offices or laboratories and the Chrysler museum was no exception as the visitor could see what Walter P. Chrysler's office supposedly looked like.  Walter Chrysler always fondly looked back at his days as a machinist since he was a tool man at heart so on display are his machinist's tools and carrying case,
The museum is fairly large in size, with three floors, but it is nowhere near as large as the Henry Ford museum complex; still, it packs quite a bit in. One of the main attractions for history buffs may well be the non-automotive pieces - one of the legendary Chrysler tank engines, designed by putting five six-cylinder engines into a radial design, each with its own distributor, sharing a cooling system that included the largest radiator most people will ever see.
The basement of the museum is another trip back in time with well over 50 vehicles from all periods in what is called "Walter's Garage."  One takes an elevator down to the basement which, visually, is strikingly different than the first or second floor of the facility.  On the lower level one will find a major focus on Chrysler's racing history especially through the late 60s and early 70s period.
All in all, this is an outstanding automotive museum and well worth the visit.

An academic question: How did the coming of the Automobile change Americans' Thinking? -- a quote from Edison

Hi folks -- I picked up an interesting book at the Goodwill this evening -- Arthur Pound, The Turning Wheel: The Story of General Motors Through Twenty-Five Years 1908-1933 (New York, Doubleday, 1934).  Thin about this Edison quote, p. 287:

"...the automobile has done more to make America a nation of thinkers than any other invention or agency.  The great value of the  automobile is not the fact that it has made easier and quicker and cheaper to go places, but the fact that it has inspired several million people to go. It has revealed to them how petty and meaningless their lives were becoming...Most of us view the automobile principally as a great business and manufacturing achievement. It is -- but it is a greater educational achievement.  In the beginning we were a pioneer people -- a restless people.  But when things came easier for us we began to lose our restlessness. The automobile is helping to restore it.  And that is one of the most healthful signs of the present generation.  Restlessness is discontent -- and discontent is the first necessity of progress, Show me a thoroughly satisfied man -- and I will show you a failure.  The wheels of progress -- especially those of the automobile -- have worked results which may be called miracles. But their service has been to raise the thinking capacity of society.

Pink Porsches!

 A mid-1970s Porsche 911 with cookie cutter wheels

 A 997 from Dubai

 A China Porsche Boxter

 Mariah Carey's Pink Cayenne

OK folks -- it seems my most viewed posts somehow have photos of pink cars!  And since I am big into getting more people interested in auto history and the Automobile and American Life, here are some pink Porsches for your viewing pleasure. But don't think for a minute that I will repaint my Irish Green 1971 Porsche 911 targa pink!

The first Miss Hurst Golden Shifter -- Perky Patty Flannery

Hi folks -- The Dayton, OH area has plenty of local auto history, and there are times I manage to miss big moments in reliving it. On Saturday night at Kil-Kare Dragway there was time to meet and listen to the first Miss Hurst Golden Shifter, "Perky Patty."  Tom Archdeacon of the Dayton Daily News, who does a great job of writing human interest stories and who is a real local treasure in his own right, put it all together in a n article published this morning in the DDN.

Patty, a farm girl who would drive around tracks like Indy, Bristol, Riverside, and up Pikes Peak and across the Bonneville Salt flats, had her moments of glory before being replaced by two other young ladies, the most prominent of whom was Linda Vaughn, written up in another blog post.

Pat, one of two women named in the 1965 Car and Driver list of the top 25 racing personalities, has hit some tough times with broken relationships and health issues, is now 73 and owns a quarter horse business in South Vienna, OH. A 1957 graduate of Northeastern High School and then an employee at Mefford Ford in Springfield, she began her promotional career as Miss ARCA and then with Hurst.

Archdeacon's article is an excellent introduction to Patty's life, but as a historian I sure would like to take a look at her Scrapbook! And after all the trials, Archdeacon has concluded that "she still has it."

Cruise-In, Beavercreek, OH, August24, 2012: a Nice Pre-war Packard Convertible and a 1958 Alfa

Hi folks -- my draft manuscript of Stealing Cars is almost ready to be mailed off to Johns Hopkins Press and I will soon be more active in posting material again. Tonight I went to the weekly cruise-in held near the intersection of I-675 and U.S. 35, and found a few favorites.  The weather was super and attendance excellent, and there were a number of cars that piqued my interest.  One was a Pre-WWII Packard convertible -- if I had the money I would love to have one of these! The other is a battered but original 1958 Alfa-Romero Spider. This car looks like nothing much has been done to it since 1958 except change the oil and fill it with gas! But another car I would love to own.