The car market in Russia is in sharp decline but sales of used cars are growing and now represent 75% of the entire market
There war in ukraine and the sanctions from western countries they have completelyand changed the car market in Russia, giving life to a scenario that was unthinkable even 12 months ago. Over the past year, the sanctions have radically transformed the Russian market and also the choices of local motorists. The data for 2022, in fact, confirms the decline in new car sales, also linked to the departure of several companies from the local market. At the same time, however, used car sales are on the rise a lot to represent almost 75% of all cars sold in Russia in 2022. So let’s see what is happening in the Russian market.
USED CARS ARE THE NEW REFERENCE OF THE AUTOMOTIVE MARKET IN RUSSIA
One of the first effects of Western sanctions on Russia was the collapse of the local car market. In a few weeks, in fact, registrations have dropped drastically. The stoppage of national production, which only partially resumed in the months following the outbreak of the war, and the stoppage of imports by Western brands blocked the market which also had to face a rate high inflation. In a short time, therefore, the Russian car market has changed dramatically. During 2022In fact, in Russia, 687,000 units were sold with a 59% decrease compared to 2021 data. In the meantime, however, used car sales have increased significantly.
USED CARS REPRESENT 75% OF TOTAL CAR SALES IN RUSSIA IN 2022
THE automotive market data in Russia always confirm greater importance of used cars. As the analysis agency Autostat reports, used cars in the 2022represented approximately 75% of all cars sold. This figure is significantly higher than that 55% recorded by the Russian market in 2021. This trend, if confirmed in the near future, could create a real “Cuba effect” which is also being talked about in Italy due to the collapse of traditions and new car sales in 2022. Market results in Russia are also affected by collapse of new car production. The cessation of the activities of Western manufacturers is in fact reflected in a return to the production levels of 1991.
ESTIMATES FOR 2023: THE RUSSIAN AUTOMOTIVE MARKET IS GROWING (SLIGHTLY)
Used cars in Russia could continue to be an important benchmark for the local market. Estimates on the future of the automobile in Russia indeed confirm a recovery of the market but with volumes much lower than pre-war volumes. THE 2023in fact, it should end with approximately 800,000 units sold (considering only new cars) in Russia. A step forward compared to 2022 but a clear take a step back from over 1.6 million units sold in 2021. In fact, therefore, the new market in Russia halved after the initial impact of the sanctions.
AUTOMOBILE SPENDING IS DOWN BUT CAR PRICES ARE RISING IN RUSSIA
Analysts point out some trends specific for the automotive market in Russia:
– THE spending on new cars collapsed by -52%a total of 1.5 trillion rubles
– THE new car prices increased by +17%averaged 2.33 million rubles
– THE used car prices increased by +32%reaching an average of 890,000 rubles
CHINA IS READY TO FILLING THE Void LEFT BY WESTERN BUSINESSES IN RUSSIA
FOR support the growth of the automotive market in Russia it could be there China. Chinese manufacturers, who have been trying to find their way into Europe for some time, will certainly try to exploit the vacuum left by Western manufacturers in Russia. In this sense, the current projects are different. Among the plans to revive car production in Russia is the return of the Moskvich brand, dating from the Soviet era, which can count on the support of JAC-Technologies, the giant of the Chinese automotive industry. The production of the new Moskvich models will take place in the former Renault factory in Moscow. Meanwhile, Chinese brands are gaining market share in Russia. The recovery of the four-wheel sector could further favor Chinese brands, destined to become increasingly relevant in the Russian market. In fact, domestic production in Russia is mainly represented by AvtoVaz which, after the exit of Renault, resumed the production of models She gives it but with now obsolete quality and safety standards. For Chinese manufacturers, therefore, internal competition could be minimal.
Source : Sicur Auto