Auto sales jump 43% y-o-y in December, but flat 2010

New car sales grew by 43% y-o-y in December 2010 bringing full year sales growth back into the black at +0.2% y-o-y, according to the data released by Auto-Consulting. Among the 163,000 new cars sold in Ukraine in 2010, ~45% were produced by local manufacturers with ZAZ and Bogdan Motors (UX: LUAZ UK) leading the list of producers. The latter posted 28% y-o-y output growth in 11M10 thanks to rapid growth of export sales to Russia. Yegor Samusenko:  We expect a revival in the domestic automarket starting in 2011, following a two years of flat sales at ~25% of the pre-crisis high. Given the abnormal fall in demand, we expect the revival to be fast and see three drivers behind that in 2011: an increase in disposable income, a renewal of consumer lending and a consumer confidence increase thanks to the stabilized exchange rate. We project new car sales to increase by 25% y-o-y for the market as whole and by 31% for Bogdan Motors in 2011, since we expect local producers to grow faster than the market based on their lower cost base.