Car prices set new record

The weighted average price of a passenger car in Russia for the first time exceeded 3 million rubles, updating the record set at the beginning of the crisis. Cars have been rapidly becoming more expensive since the beginning of hostilities in Ukraine, which is facilitated by the expanding presence of brands from China on the market while maintaining a supply shortage in the mass budget segment. In August, prices were boosted by an increase in recycling collection and an additional weakening of the ruble, which continued in September. However, demand is not falling: market participants and experts expect that sales at the end of September will remain above 100 thousand cars.

According to Autostat, the weighted average price of a passenger car in the Russian Federation in August increased by 9.8% compared to July, reaching 3.13 million rubles. The agency notes that the figure exceeded 3 million rubles for the first time, citing the effect of the “most significant” increase in the price of cars this year, which occurred in August due to an increase in recycling collection and the weakening of the ruble.

The growth of recycling collection was uneven. It increased as much as possible for cars with an engine from 3 to 3.5 liters: the amount of the fee from August 1 amounted to 970 thousand rubles. instead of 259.6 thousand rubles. for each car. The weakening of the ruble, dealers noted, had the greatest impact on cars supplied through parallel imports, and less on those officially presented on the market.

Even Rosstat noted a record in August, but they calculate average prices for cars without taking into account sales volume and only on the basis of the cost of basic equipment. Thus, according to the department, the cost of a domestic car for the first time exceeded 1 million rubles, and foreign cars – 2.3 million rubles, which is 1.1% and 2.1% higher than a month earlier, RIA Novosti wrote.

According to Kommersant’s calculations, the average increase in car prices in August was 4-20%, and the number of trim levels for which the price lists were updated was 2.5 times higher than in July.

The process of increasing recommended retail prices continued in September, with market participants believing that brands had not yet transferred all the new costs into prices and could still contain them (see “Kommersant” dated September 18).

Until the summer of 2023, the peak weighted average price of a passenger car in Russia (RUB 2.8 million) was noted in March 2022, when, after the outbreak of hostilities and a sharp devaluation of the ruble, automakers updated their price lists, and car dealerships experienced rush demand. After this, prices quickly began to decline as stocks of premium segment cars were depleted and prices stabilized.

However, since February 2023, the cost of cars has returned to stable growth. As a result, over the year since August 2022, as reported by Autostat, the weighted average price of a car has increased by almost 1 million rubles, or 46%.

The share of Chinese brands in the market continues to grow, and they are gradually introducing more premium cars into the Russian Federation, notes Sergei Udalov from Autostat, that is, the weighted average price is growing “not only due to the rise in price of cars, but also due to the shift to the more expensive segment cars.” He clarifies that the decrease in the weighted average price after the peak in 2022 occurred as Lada’s market share grew and the remnants of foreign cars were washed out, when Chinese brands were not yet actively increasing supplies. Now model ranges are growing, premium cars, including electric ones, are appearing, while in the mass segment (segment B, small sedans) the supply has not expanded, the expert explains.

According to Mr. Udalov, in September the weighted average price will also increase, and this will not hold back the market – sales will be approximately at the level or slightly higher than the August result. At that time, 109.7 thousand cars were sold, which was a record figure since the beginning of the crisis.

Automotive expert Vladimir Bespalov adds that price fluctuations in the moment can slow down sales (or, conversely, cause a surge in demand in anticipation of rising prices), but the sales potential of 1.5 million cars per year remains, and demand always comes to new price realities: “The peak of the ruble’s weakening will pass, and now this value will be fully reflected in prices, after which the situation will also normalize and market growth will continue.” At the same time, Mr. Bespalov clarifies, saturation of the budget mass segment is unlikely in the context of imports or the start of localization projects at the current level of the ruble exchange rate.

Olga Nikitina