Sales of light commercial vehicles fell 6.3% in the first half of the year

The market for light commercial vehicles failed to go positive in the first half of the year, showing a fall of 6.3%. The problem is that the supply is very limited: in addition to domestic GAZ, UAZ and Sollers, warehouse balances are actually sold out. This situation is also observed for Lada, since the resumption of production of Largus is scheduled only for September. But dealers say brands from China are gradually entering the LCV segment, which will help saturate the market.

Sales of light commercial vehicles in June rose by 51% to 7.4 thousand units, calculated “Autostat” based on the data of the “Electronic passport”. Nevertheless, according to the results of the first half of the year, sales decreased by 6.3%, to 37.7 thousand units. Such dynamics is due to the high base of January-March 2022, when about 8.6-9.8 thousand light commercial vehicles were sold per month. The market has not yet reached these volumes, only once approaching them – in December 2022 (8.4 thousand units sold). Nevertheless, since March 2023, sales have been stable at about 7,000 vehicles per month.

The growth in demand for new commercial vehicles in June was caused by the low base of June 2022, when Russian companies were in no hurry to renew their fleets in the face of financial instability, says Evgeny Zhitnukhin, head of the dealership of the Fresh automotive marketplace. Also, the expansion of the range of offers from banks and official dealers with more favorable leasing conditions became prerequisites for increasing sales.

Consumer demand is growing, but the recovery is proceeding from a relatively low base in 2022, and in comparison with 2021, the decline remains significant, adds Oleg Markov, CEO of Modern Transport Technologies Group.

He calls the competition in the market still intense, noting that European players are being replaced by new Asian brands “with still insignificant volumes.” In particular, chains of parallel imports of premium segment minibuses were established, which are used as a family car, adds Mr. Markov.

Vladimir Zhelobov, director of the buyout department for Avtodom and Avtospetstsentr, says that the overall decline in demand in the LCV segment is due to the fact that the business is experiencing difficulties. In addition, “there are no replacements for the departed Japanese and Korean brands yet, but an alternative to them may appear in the near future,” he continues. “First of all, the offer on the LCV market is represented by the GAZ brand and numerous Chinese brands that are just entering the Russian market,” explains Mr. Zhelobov. “It is realistic to saturate the market and give the right price only by bringing Chinese brands through the organization of a full-fledged distributor.”

Now only one Chinese brand, Dongfeng, is in the top 10 of the LCV segment, with sales of 335 cars in the first half of the year, including 58 cars in June. In sales for the first half of the year, 59% accounted for the models of the GAZ group, another 18.5% for UAZ. The shares of other brands are less than 10%, but this is also due to the fact that their warehouses are being sold or the brands are just entering the market (like Sollers with the Atlant model). Thus, the only Ford model – Transit, which was produced in the Russian Federation before the crisis and ranked second in popularity after GAZ models, is still among the sales leaders, but with a market share of 3%. Even the domestic Lada with commercial versions of the Largus model occupies only 5.4% of the segment in the first half of the year, since its production is also not being carried out – AvtoVAZ plans to resume it in September.

The deficit in the LCV market remains, as well as in the automotive market as a whole, Andrey Gusev, Deputy Director of the Corporate Sales Department of Avilon, states.

“But if the passenger car segment shows good positive dynamics both due to the entry of new manufacturers with official deliveries and through parallel imports, the LCV segment is developing much more slowly,” he continues. According to Andrey Gusev, the deferred demand of last year is being realized in the LCV segment and this trend will continue in the coming months. Sergey Udalov from Avtostat also expects that the market will continue to recover and sales will be at least 7 thousand units in the coming months.

Olga Nikitina