AvtoVAZ sales are growing at a record high

AvtoVAZ may sell another 230,000 vehicles in the second half of the year, which will be a record volume over the past ten years since 2012. In recent months, sales of the domestic automaker have been growing, as well as the entire market, but in order to achieve plans for the year, Lada must increase the pace by 1.5 times in the remaining months. Analysts note that in the absence of problems with Vesta components and against the backdrop of a lack of competition, such results are quite possible.

AvtoVAZ sales in July 2023 (29.4 thousand units) set a record for this year, as well as the highest for July over the past five years – in 2018 the monthly result was only 11 vehicles higher. In June, AvtoVAZ sold 27.8 thousand cars, in May – 23.9 thousand cars.

The entire market is also growing – in June, sales were 14.2% higher than in May, amounting to 82.4 thousand units. Both Avtostat and AEB will present the July result on August 4, but Avtostat’s weekly results already indicate continued growth. The market in July was warmed up by the expectation of an increase in the waste collection from August 1 and the weakening of the ruble, which lead to higher prices.

The impetus to sales, in particular, was given by the expansion of model lines in a scarce market, including the launch of sales of Lada Vesta. In June, almost 4.3 thousand of them were sold, and in July already 5.1 thousand.

In the coming months, AvtoVAZ is going to increase production rates by increasing the capacity of the line where Vesta is produced, up to 40 cars per hour, and the line of the most budgetary Russian model Granta, up to 52 cars per hour.

The management of the automaker announced plans to produce “more than 400 thousand” cars in 2023. In January-July, sales amounted to almost 173 thousand units. Based on this, AvtoVAZ needs to sell at least another 227,000 vehicles by the end of the year. The production balance at the end of each year is about 20 thousand cars, the company confirmed to Kommersant – in fact, this allows you to compare output and sales. AvtoVAZ itself does not provide sales plans, focusing on a market share of 40%.

In order to achieve such sales, the concern must sell 15,000 more cars per month on average by the end of the year than in July, that is, 45,000 cars. Close to this sales volume at AvtoVAZ in the second half of the year was last recorded in 2012. Then the car market in the Russian Federation reached a volume of 2.9 million cars, and AvtoVAZ itself was still selling its classic line, including Lada 2107, Samara, Priora. Of the current line, only Granta was in the top of sales. In total, 537.6 thousand Lada cars were sold in 2012, of which 247.2 thousand were sold in the second half of the year.

In 2013, Lada has already sold 456.3 thousand cars (with a market of 2.8 million units). In August-December 2013, Lada sold 192 thousand cars. Then the car market plunged into a crisis, including due to sanctions in 2014, and the number of players in the market was declining: in 2015, the first foreign automaker, General Motors, closed its production facilities in the Russian Federation.

In general, the forecast of Avtostat assumes that in 2023 from 860 thousand to 1 million cars will be sold, based on this, on average, almost 100 thousand cars should be sold per month, which is almost 18 thousand more than in June .

In the segment where Lada is present, there is no competition now, Sergey Udalov from Avtostat emphasizes: “If earlier Renault Logan, VW Polo, Hyundai Solaris, Kia Rio were in the Vesta segment, now these cars are not delivered to the Russian Federation as officially, and parallel imports. There is no competition in both form factor and price, he adds, while Vesta and Granta are the most massive cars.

The situation with the weakening of the exchange rate, which affects everyone, and the increase in salvage fees may further shift demand towards Vesta due to the increase in the price gap with other players. In particular, this can attract corporate customers, the expert believes, and in such conditions everything will depend on the production capabilities: “Now AvtoVAZ has incomplete cars, and when these problems are resolved, they will enter the market.” In the absence of new problems, he elaborates, “sales growth will be progressive.”

Olga Nikitina