In sedan conditions – Newspaper Kommersant No. 227 (7428) dated 12/07/2022

The car market of the Russian Federation in 2022 will be reduced by 60%, amounting to 664-666 thousand cars, follows from the forecast of Kommersant and profile analysts. This is 1 million cars less than a year earlier. In conditions of shortage, there will be no traditional New Year’s sales: dealers no longer need to fulfill importers’ annual plans and get rid of stocks. Analysts note that prices will now go down only as the market becomes saturated.

In 2022, sales of passenger cars and light commercial vehicles (LCV) will fall by 60.2%, amounting to about 663.9 thousand vehicles, Kommersant estimated. Calculations are based on 11-month statistics from the Association of European Businesses, which exclude sales reports for Chery and its Exeed brand, and BMW and Mercedes-Benz for October and November. Sales of the last two brands combined totaled only 1,700 units in the third quarter amid running out of stock and no new shipments. Kommersant did not take into account parallel imports, but used Avtostat data for October-November on the passenger car market to assess the sales of Chery and Exeed, which are officially imported into the Russian Federation.

Automotive expert Vladimir Bespalov also expects a 60% drop in sales this year, to 666,000 cars and LCVs. At the same time, the expert also does not predict an active surge in demand for cars in December, earlier than the traditional pre-New Year sales season, expecting them to be approximately at the same level as in November (47,000 units excluding the above brands). “In the context of a shortage of cars on the market, dealers are not interested in draining warehouses, as was the case before,” he notes. Sergey Udalov from Avtostat agrees that the traditional December sales surge of 25% should not be expected, because none of the factors of this formula work, including the need to fulfill sales plans.

Traditional New Year’s sales are not expected this year, confirms Alexei Starikov, deputy general director for sales of new cars at Avilon. At the same time, he adds that there are profitable offers for cars of Chinese brands that are still valid. “Traffic in car dealerships, as well as during November, is moderate, we don’t see any hype,” continues Mr. Starikov, “but at the same time, we see high demand among customers for those new items that came to us through parallel imports.” According to him, some buyers were just postponing the purchase of a car, waiting for new arrivals and expanding the range of dealers. “If the current conditions persist, the car market expects a fall in January against the backdrop of a shortage of cars,” predicts Mr. Starikov. “The shortage is still palpable.”

Head of Fresh Auto dealership Denis Reshetnikov does not see a surge in sales in December, but he speaks of a 19% increase in traffic in stores compared to November. “This is due to the “deferred demand” that formed in September after the announcement of a partial mobilization, as well as the expectation of traditional discounts and the fear of an increase in prices in the new year,” he notes. There are discounts now, but not in such volumes as before, Mr. Reshetnikov notes. The situation in the car market in January and in general in 2023 will depend on the volume of supply of both new and used cars, their cost and the real income of Russians, the dealer concludes.

In January, according to Sergei Udalov, about 35,000 cars will be sold against the backdrop of a seasonal decline. Vladimir Bespalov also speaks of a seasonal decline in activity in January, expecting sales to decline to 35,000–40,000 cars and LCVs, excluding parallel imports.

“In February, sales will slightly recover to previous levels, and by March they will improve due to the supply of Chinese cars,” the analyst believes.

He notes that now Chinese concerns, unlike this spring, can realistically assess their growth opportunities in the Russian market, and their supplies will increase. In addition, the Moskvich project will be launched in full, he adds. At the same time, AvtoVAZ in such conditions will still retain the main market share, he continues, because it is far from saturation, and without this, prices will not go down: “Moreover, even when sedans from China enter the market due to duties and salvage will be able to offer a price niche close to Lada. Lada, in turn, will be able to increase the interest of customers at the expense of Vesta and Largus, if they are close to the cars offered by Lada before the current crisis.”

Sergey Udalov agrees that “until the shortage of budget sedans – including for carsharing and taxis – is eliminated, prices will not go down.” At the same time, the expert does not expect a significant increase in the supply of stamps from China.

Olga Nikitina