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Gas Guzzlers Still Kings of Russia's Roads.

Europe Intelligence Wire

| July 01, 2008 | COPYRIGHT 2008 Financial Times Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

(From The Moscow Times)

As American automakers ponder record losses due to the falling popularity of trucks and SUVs, larger carsare breaking sales records in Russia.

May was the first month since 1991 that a sedan outsold the popular Ford F150 truck in the United States, indicating that the love affair between Americans and gas-guzzling automobiles may be ending. U.S. automakers like General Motors, Chrysler and Ford, which have traditionally relied on strong truck sales, are feeling the strain of declining sales as people switch to more fuel-efficient Asian models.

Meanwhile, Ford's sales in Russia jumped 36 percent in May to 18,600 vehicles. GM is also reporting explosive growth of 69 percent in Russia during the first quarter of 2008, including a 60 percent growth in sales of its heavy off-road Hummer vehicles. According to Autostat agency, the share of SUVs in foreign-made car sales in Russia has been steadily increasing for several years, reaching 18.2 percent at the end of 2007, a 3 percent increase over 2006.

The popularity of larger cars in Russia is growing despite rising gas prices, which averaged an equivalent of $3.97 per gallon for 95 octane fuel in June.

Alexei Biryukov bought his Hummer H2 at the beginning of 2008. It was his first car purchase and a completely irrational one, he said. "My soul wanted something festive," said Biryukov, "I like its capabilities and the fact that it's unusual." Biryukov said he usually drives a corporate car to the office, but when he is in a bad mood, he takes the Hummer. The price of feeling unhappy: 4,000 rubles per week to fill up the H2, which weighs almost 3 tons and has gas mileage of about 12 mpg, according to Motortrend.

The Hummer made a splash in Moscow a year ago with an aggressive advertising campaign. "Out of the way!" snarled the caption on one of the roadside billboards featuring a shiny black Hummer airborne against black background. Below, the stop-and-go traffic inched along Leninsky Prospekt, a major thoroughfare in southwestern Moscow.

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