This year, the Russian car market is growing steadily. However, its structure has changed a lot - cars from China and other "friendly countries" have replaced the Western brands that left the country. The share of domestic brands is also growing. At the same time, there are fewer and fewer affordable cars, they continue to become more expensive.
Sales of new and used cars in Russia are growing
Sales of new cars have increased significantly in Russia over the year. According to JSC "PPK", in 9 months they increased by 59% and amounted to 1,174,575 units. At the same time, 49.5% of sales are accounted for Russian brands.
According to a study by Otkritie Avto and the AUTOSTAT agency, the popularity of used cars is also growing. In October 2023 alone, Russians spent 518 billion rubles on the purchase of used cars, which is 33.7% more than in October 2022. In 10 months of 2023, Russian residents spent 4.84 trillion rubles on used cars.
However, it is worth noting the slowdown in the market in the last month. So, in November, 109.7 thousand new cars were sold in the country, which is 2.3% less than in October. The used car market has also seen a decrease of 2.4% over the past month.
Domestic and Chinese brands occupy a large part of the market
There is a real boom of domestic and Chinese car brands in Russia right now. Lada sales in Russia increased 2.1 times in October, breaking a record of 10 years. In November, 36,054 passenger and commercial LADA models were sold in Russia, which is 65.9% higher than in November 2022. In 11 months, brand sales increased by 94.1% to 319,518 new cars.
The Moskvich brand is also increasing its presence on the market. Oleg Maslyakov, production director of the Moskvich automobile plant, told RIA Novosti in an interview that the brand plans to produce 50 thousand cars in 2024. In the future, Moskvich plans to export its cars, but so far it is focused on the domestic market. By the end of 2024, the manufacturer will release a new Moskvich 8 model.
However, so far, Chinese manufacturers seem to be overtaking Russian ones. According to Otkritie Avto, in October, 60% of buyers chose Chinese brands. Boris Titov, chairman of the Russian part of the Russian-Chinese Friendship, Peace and Development Committee, Commissioner for the Protection of the Rights of entrepreneurs, told reporters that in value terms, Chinese exports of passenger cars to Russia increased by 543% in 2023, and Chinese cars already occupy 53% of the Russian market.
However, not only Chinese cars have entered the Russian market. According to the Autonews media, sales of the Iranian brand Iran Khodro Dena started in November in the country. One of the main advantages of the new brand was its affordable price - 1.6 million rubles. The Lada Vesta costs about the same amount. Time will tell whether Iranian cars will be able to compete in the market with the "Chinese" and "Russians".
Will cars continue to get more expensive in 2024?
Some experts consider the rise in car prices to be a serious obstacle to the market. According to Rosstat, from the beginning of the year to November, prices for Russian-made cars increased by 14.4%. At the same time, as Autonews explains, LADA and other affordable foreign cars are becoming more expensive. There are almost no offers of new cars below 2 million rubles on the market.
Experts interviewed by Kommersant expect that car prices in Russia will continue to rise in 2024, but they do not give specific forecasts due to the already high cost of cars and loan rates. At the same time, car sales in Russia are expected to grow by about 10% next year.
Svetlana Volodina, managing director of the international consulting company Avtoboss, said in an interview with RIA Novosti that the situation in the Russian automotive industry was difficult until 2023, but the crisis has already passed.
"Until the beginning of this year, the situation in the domestic automotive industry was really very difficult, getting worse every day. There was a sharp decline in the industry, and several problems accumulated. Both for cars and for spare parts," Volodina commented.
PSB analysts note that sales of new cars began to decline after 10 months of growth. According to experts, the drop in car sales is due to the effect of a low base in 2022, an increase in the cost of foreign cars, an increase in the recycling fee and the Central Bank's key rate.
"We believe that the decline in new car sales will continue in December and will continue until mid-2024. A recovery in demand will be possible after a reduction in the key rate, as well as a slowdown in the growth of the cost of foreign cars. Despite the correction in the shares of KAMAZ and Sollers in the autumn, we maintain a positive assessment of the companies and consider them fundamentally strong. KAMAZ and Sollers continue to occupy a significant market share after the departure of foreign manufacturers," the experts concluded.
