Car sales to exceed 100,000 in August for the first time since 2021

Demand for cars in August remains stably high, despite the increase in prices, and the result for the month will update the local record. According to Kommersant’s calculations, sales will reach the level of about 107 thousand cars, which is only 10 thousand below August of the pre-crisis 2021. Analysts note that low sales in 2022 and a shortage of cars have created pent-up demand, which now, against the backdrop of expanding supply, will inevitably be realized.

According to Avtostat, 23.8 thousand cars were sold in the Russian Federation during the week from 21 to 27 August. This is 6% more than the previous week, which showed the worst result for this month – 22.4 thousand cars sold, and approximately at the level of the second week of the month (23.1 thousand).

At the same time, the expectation of updating price lists against the backdrop of a weakening ruble and an increase in salvage fees from August 1 gave a surge in demand in the first week of the month (from July 31 to August 6) – then sales were record-breaking, amounting to 28.9 thousand cars. Thus, the subsequent rise in prices and the increase in the Central Bank’s rate in the middle of the month nevertheless reduced the pace of sales.

Demand for new cars in August was within the plans for this month, there were no distortions from changes in the value of the ruble, says Andrey Olkhovsky, general director of Avtodom Group of Companies. He explains that car buying deals usually don’t happen overnight. “There is a process of selection, approval of financial products, and only then does a transaction take place,” he explains. “In this case, during the period when the rate of the Bank of Russia was raised, previously agreed and approved transactions were closed.”

Andrey Kamensky, marketing director of Avilon AG, agrees that there is no significant decrease in demand for new cars in August. “Buyers are still trying to make a deal before the next price increase, and the news about the increase in the key rate of the Central Bank only strengthened this,” he says.

The average cost of a new car in August increased to 3 million rubles. due to the increase in the recycling fee and the low exchange rate of the ruble, adds Evgeny Zhitnukhin, head of the dealership of the Fresh automotive marketplace, but demand remained high throughout the month.

By the end of the year, price tags for new cars can be expected to rise by another 30% due to the volatility of the ruble exchange rate and higher customs clearance costs, Mr. Zhitnukhin predicts.

In addition, the availability of warehouse stocks at old prices also influenced. Andrey Olkhovsky says that for about a month such cars will still be presented in showrooms. Andrei Kamensky, however, notes that today cars from earlier imported lots are presented at dealers in extremely limited quantities. Yevgeny Zhitnukhin also notes that there were practically no cars at the old prices left in the warehouses of dealers by the end of this month.

Based on the data of Avtostat and calculations by Kommersant, in August the market will reach the level of about 107,000 new cars, continuing the recovery trend. Prior to this, the monthly record since February 2022 was in July, when sales amounted to 95.7 thousand vehicles. Sales have not risen above 100 thousand since 2021. Judging by the data for 2021, the result will be about 10 thousand lower than the pre-crisis August. According to the results of seven months, 497.2 thousand new passenger cars were sold in the Russian Federation, Avtostat reported based on the data of the Electronic Passport. The agency’s forecast suggests an increase in sales to 1 million cars at the end of the year, or sales at the level of 100 thousand cars in the remaining months.

Automotive expert Vladimir Bespalov says sales of around 100,000 vehicles in the coming months, excluding low seasons, are a realistic scenario. It points to the still high level of unsatisfied demand, which has been forming since the spring of 2022 against the backdrop of a shortage of supply. Now, the analyst continues, the offer in different niches is gradually expanding, it is “better than a year ago”, and, obviously, the fleet should be updated. In August, sales were also partly affected by the expectation of a rise in car prices, which probably gave a surge in sales at the beginning of the month, Mr. Bespalov concludes. At the same time, the analyst notes that the remaining lack of supply is now balancing the price level.

Olga Nikitina