Cars pretended to be cheap – Newspaper Kommersant No. 2 (7447) dated 10.01.
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Prices for cars in the Russian Federation since January 1 remained at the level of last year, contrary to the trend of previous years. This is due both to the cessation of supplies of brands officially presented in the Russian Federation, and to the lack of excitement among dealers. In addition, Chinese brands have changed their strategy: instead of price lists, they update discounts, increasing or decreasing their size, and thus adjusting costs and margins. At the same time, dealers and analysts expect prices for 2023 cars to rise.
Since the beginning of 2023, Russian car dealers surveyed by Kommersant have not recorded an increase in recommended retail prices (RRP) for passenger cars supplied by official distributors. Denis Reshetnikov, head of the Fresh Auto dealership, notes that as of January 9, the RRP for cars supplied to the Russian Federation has not changed. Traditionally, he says, at the beginning of the year, importers increase the cost of their cars by the amount of inflation – by about 3-4%, but at the end of 2022, a number of brands have already reported a price increase of 7%. He cites a number of Chery models as an example, however, in fact, it was not about changing the RRP, but about changing the size of the discount from the manufacturer in December. Chery clarified that the price list of December 30 continues to be valid in January.
Judging by the Haval price lists, the brand has also changed the size of the discount: for example, now the site for the Dargo model shows the cost of all configurations, taking into account the benefit of 150,000 rubles, while the actual RRP without taking it into account remains the same. For other Chinese brands, prices changed in different directions compared to December 29. For example, prices for Changan Uni-K rose by 3.6%, while other models, on the contrary, fell in price. Sergey Udalov from Avtostat notes that the practice of managing the size of the discount was already on the market for Korean brands: this helps to quickly respond to changes in supply and demand.
Avilon Retail Sales Director Renat Tyukteev notes that RRPs in the new year are static relative to December 2022, even though the yuan exchange rate against the ruble has been growing for two months in a row.
At the same time, cars of the 2023 model year, as well as price lists for them, have not yet appeared in companies from China: one of the importers clarified that the cars are still in warehouses in China. In past years, by this time, as a rule, new RRPs have already been announced. “The final price will depend on a number of factors – the exchange rate, logistics costs, the requirements of the Russian government for customs clearance of imported cars,” says Denis Reshetnikov. “Cars that are assembled in Russia will rise in price within the limits of inflation. In my opinion, an increase of 5-10% minimum is possible.”
Traditionally, cars of the new model year are 3-4% more expensive than the previous series – this was also the case at the beginning of 2022, when the price list was updated even by those brands whose prices rose a month earlier, including AvtoVAZ. In 2023, prices for Lada cars remained stable – as AvtoVAZ reported, they were not updated in December either. But the number of unavailable trim levels and models still prevails over the available ones, even for the base Granta model.
The demand for cars, even in December, which was traditionally considered the high season, in 2022 remained 58% lower than a month earlier, Avtostat estimated. During the holidays, according to Renat Tyukeyev, the demand for buying cars was even: “Chinese brands were sold more actively, here expansion into the market shares of European and Korean brands is slowly but surely materializing.” According to Denis Reshetnikov, traffic to Fresh Auto dealerships increased by 13% between January 1 and 9, and the peak of visits fell on January 2.
Demand in Avtospetstsentr centers during the holidays was approximately at the level of early December, they say: “In the first days of January there was a traditional lull, in the middle of the holidays, customers bought cars from Chinese manufacturers, as well as cars from Nissan, Hyundai, Kia and others.” Not all manufacturers have announced the RRP yet, they add: it is likely that they will increase by 3-7%. Activity in Avtodom dealerships was also at a low level in early January, but they are talking about accumulated pent-up demand and the absence of prerequisites for price cuts. Sergei Udalov notes that price lists will continue to grow, and prices for parallel imports will change depending on market saturation.
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