In October, the car loan market showed the greatest growth in the retail segment
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After the recession that began in August, auto lending showed the greatest growth among other types of retail lending. However, there is no question of a turning point, experts believe. Expanding the range of Chinese cars, parallel imports and an increase in the number of subsidized programs, in their opinion, will support the market only in the short term. In 2024, given the continued tight monetary policy of the Central Bank, auto lending will cool down.
According to Frank RG, in October Russian auto lending showed the greatest growth in the retail segment. 115.8 thousand car loans were issued, which is 19% more than in May. Their volume reached 166.5 billion rubles. (an increase of 17%). The recovery occurred after two months of decline in indicators – by 10% in September and 5% in August (see Kommersant on September 7 and October 6). Prior to this, the market had been growing at a record pace since April (see Kommersant on May 11, July 31).
In October 2023, the total volume of retail loans issued amounted to RUB 1.526 trillion, Frank RG estimates, having decreased by 12% compared to September. Mortgages fell (by 19%, to 775.6 billion rubles) and cash loans (by 9%, to 537 billion rubles). In addition to car loans, growth was shown by the POS loans segment (by 2%, RUB 47.2 billion).
Experts attribute the revival in the car lending market to the expectation that rates will continue to rise. “In September, the Bank of Russia took another step in raising the key rate (by 1 percentage point, to 13%).— “Kommersant”) and gave a signal that growth will continue. Based on this news, those who were already planning to buy a car rushed to do it,” explains Frank RG project leader Stanislav Sukhov. At the end of October, the Central Bank raised the key rate even sharper than market participants expected – by 2 percentage points, to 15% (see Kommersant on October 28). At the same time, the average value of a car loan decreased for the second month in a row and reached 1.44 million rubles in October. (3% less than in August).
The current growth will not be a restoration of the mid-year trend, market participants believe. In the short term, it will be supported by an expansion of the range of Chinese cars, parallel imports, and an increase in the number of subsidized programs, VTB expects. But the remaining amount of state support is 1.2 billion rubles. (see “Kommersant” on October 2) and annual sales plans, which banks and dealers will strive to implement in December, will only temporarily smooth out the negative trend, clarifies Mr. Sukhov. Moreover, the volume of loans issued under the preferential car loan program is not very high. This is due to restrictions on the categories of population to which subsidies apply, adds Vyacheslav Yakubchik, head of the department for the development of partnership programs and strategic segments of Rosbank Auto.
This year you shouldn’t count on the traditionally high pre-New Year season, says Victoria Sinichkina, director of the automotive practice of Trust Technologies. In her opinion, among other things, the market will be hampered by a decrease in the quality of borrowers – banks will increase the cost of loans due to additional risks.
In 2024, market participants expect auto lending to cool down. “The Central Bank’s tight monetary policy will be maintained at least until the middle of the year, which will become a determining factor for the market,” explains Stanislav Sukhov. According to Sergei Grishunin, managing director of the NRA rating service, lending growth may decline to 3–5%. The expert even allows for a decline of within 2%. The market recovery is over, and the volume of new car loans in 2024 will amount to 900–950 billion rubles, he clarifies.
At the same time, subsidies from car manufacturers and an increase in shipments of inexpensive Russian-made cars can help support the market, says Marina Dembitskaya, head of Otkritie Auto (automotive business unit of Otkritie FC Bank).
In addition, a loan continues to be the only way to buy a car for most buyers, market participants and experts admit. “Therefore, we expect that the share of cars purchased using car loans will not decrease,” explains Vyacheslav Yakubchik. According to the results of January-August (see Kommersant on September 27), Russians purchased more than 51% of all new cars and 10% of used cars using borrowed funds.
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