Business

Hummers Buck Recession Trends In Russia

  • Playlist
  • Download
  • Embed
    <iframe src="http://www.npr.org/player/embed/112872571/112872623" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

The recession has hit hard in Russia, and car sales are down 50 percent compared with last year. But one car marketed to the wealthy has bucked that trend: the Hummer. Though sales have dropped dramatically in the U.S., the gas-guzzling American icon is having a banner year in Russia.

RENEE MONTAGNE, host:

In Russia, you can learn something about consumer attitudes, at least among the rich, by looking at the road. Car sales are down by 50 percent this year, but you will see more and more Hummers. Peter Van Dyk reports from Moscow.

(Soundbite of car engine revving)

PETER VAN DYK: Alexi Burokov(ph) wears a smart suit and works for a Western company in an ultra modern Moscow office, but at the weekend everything changes.

Mr. ALEXI BUROKOV: I driving in a boring Volvo during weekdays. And then when the weekend is coming I change my lifestyle. It's like, you know, when you com home you take the tie off and then you breathe. It's a freedom.

VAN DYK: Berokov is one of the founders of the Russian Hummer club which has some 800 members.

Mr. BEROKOV: It's a feeling of the freedom which gives the car. Americans as well as Russians, we all like freedom and this car gives you the feeling of the freedom because you can go deeper into the forest, you can afford to drive it off road, across the field or the other places where normal or any other car probably would stop.

VAN DYK: But the Hummer's appeal is not just off-road. Berokov says Russia's notoriously bad drivers and roads, on which 30,000 people die each year, make another strong case for buying a Hummer.

Mr. BEROKOV: The condition of the roads which we all used to complain about and also the style people are driving in Moscow, and the crowded cities like Moscow, gives you some preferences when you're driving Hummer and I think that's suitable car for Russia, maybe, except the amount of gasoline it takes.

VAN DYK: So in a country where the average monthly wage is $600 and gas costs $2.60 a gallon, the average Russian isn't in the market for a Hummer. Yuri Moronov(ph), a salesman at Auto Center City in Moscow, says prices start at $40,000 for an H3 going up to around $80,000 for an H2.

Mr. YURI MORONOV (Salesman, Auto Center City in Moscow): (Through Translator) The Russian buyer, if you take the H2, the biggest car, is a man over 30 with a high income. If you take the H3, more affordably priced, you can talk of younger people, 25 years old. But as a rule: men.

VAN DYK: Moronov says it doesn't take much sales patter to sell his products. His last customer just walked in and bought one, and, like most customers, he paid in cash.

Mr. MORONOV: (Through Translator) Of course, as a rule, people who buy Hummers know what they want because there is no equivalent to a Hummer. All that remains is to pick a dealer.

VAN DYK: Hummers have been built in Russia's Kaliningrad Region since 2004, but sales really took off this year when almost every other brand was tanking. Andre Kolosov(ph) is the marketing director for GM Russia.

Mr. ANDRE KOLOSOV (Marketing Director, GM Russia): Product availability played a good role to help product on the ground. We managed to keep very attractive, but at the same time very market-oriented prices.

VAN DYK: But Kolosov says the vehicle's popularity is not about lower prices. He says the Hummer is big, and brash, and suits today's Russia.

Mr. KOLOSOV: I think as a - not that strong anti-fuel guzzlers are moot in society. And at the same time there are a lot of people who like to display to show themselves.

VAN DYK: So far, sales have doubled year-on-year to more than 900 vehicles, twice as many as the rest of Europe combined. But Yulana Socnova(ph), an automobile sector analyst at VTB Capital, doubts those figures are sustainable.

Ms. YLANA SOCNOVA (Automobile Sector Analyst, VTB Capital): I don't think that we will continue to see very significant growth, because still Hummer is very specific vehicle. Yes, probably there is some unsatisfied demand, but once it is over we will not see a significant growth.

VAN DYK: But that unsatisfied demand, in both Russia and China, is big enough for a Chinese company to want to buy the Hummer brand from GM. Reports say negotiations on a sale are well advanced.

For NPR News, I'm Peter Van Dyk in Moscow.

(Soundbite of music)

Copyright © 2009 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR’s programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

NPR thanks our sponsors

Become an NPR sponsor

Support comes from