The car market is being dismantled for spare parts – Newspaper Kommersant No. 54 (7499) dated 03/30/2023

The car market will reach the pre-crisis level only in 2027, follows from the forecast of “Trust Technologies”. At the same time, against the backdrop of a decline in car production in 2022, the demand for auto components for production decreased, but the need for spare parts for car repairs increased markedly: they, according to the authors of the study, will lead in sales in the next five years. Car dealers confirm the trend towards extending the life of cars, supporting the demand for spare parts.

In 2023, the passenger car market will grow by 7%, to 670,000 units, according to Technologies of Trust (TeDo, formerly PwC), and then the market will recover with an average annual growth rate of 22%. The optimistic forecast assumes growth by 28% (to 800 thousand) this year and a further increase in sales by 18% per year.

In both scenarios, the market will approach the pre-crisis level of 1.5 million cars only by 2027, and even such a forecast is based on an improvement in the geopolitical situation, the development of production and parallel imports.

The forecast looks quite conservative, for example, in 2023, Avtostat expects the market to grow by 25%, to 780 thousand units in the baseline scenario (in the pessimistic — by 0.6%, in the optimistic — by 39%).

Director of automotive practice “TeDo” Victoria Sinichkina adds that the decrease in the supply of new cars has led to an increase in demand in the spare parts market to maintain the existing fleet.

In general, the market for auto components (for initial equipment at production) and spare parts (for maintenance and repair) in 2022 decreased by 14.8%, to 2.6 trillion rubles, TeDo specified. Moreover, the trend will continue, and in 2023 the market will decrease by another 1.8% to over 2.5 trillion rubles, after which recovery growth will begin by about 4.6% annually.

At the same time, the spare parts segment even in 2022 grew by 4.6%, to 1.9 trillion rubles, that is, the fall was due precisely to the reduction in the component market (by 41.8%, to 750 billion rubles).

If in 2021, components in monetary terms accounted for 41.8% of the market, and spare parts – 58.2%, then in 2022, components accounted for only 28.5%, and in 2023 the share will decrease to 23.7% and will remain at this level until 2027, according to TeDo.

This assessment corresponds to the market picture: in 2022, car factories were idle in whole or in part amid difficulties with logistics and sanctions – in particular, the EU banned the import of components worth more than €300 into the Russian Federation. At the end of the year, according to TeDo, sales of domestic brands in quantitative terms decreased by 48%, localized foreign production – by 66.1%.

The term of owning a car is increasing, explains Roman Timashov, Director of Service at Avtodom Altufyevo. “We see how the attitude towards the car is changing: most owners are trying to keep the car technically sound, and also prefer to optimize the costs of its maintenance,” he continues. According to him, the trend towards extending the service life will continue until car sales reach 2-2.5 million per year. At the same time, prices for spare parts are growing in dynamics with the dollar and the euro, adds Mr. Timashev:

“If we compare the cost of unique parts at the beginning of 2022 and now, then on average prices have increased by about two times.”

Demand for spare parts will continue in 2023 as the age of the Russian car fleet increases, Alexander Nosko, director of service for the Fresh Auto car dealership network, agrees. He talks about a 20-40% increase in prices for spare parts compared to last year, expecting the trend to continue in 2023. Sergey Parshikov, Deputy General Director for Avilon Service, also admits that the price of spare parts will continue to rise, since their cost depends on the ruble exchange rate, which is declining.

At the same time, Tatyana Ovchinnikova, director of the Fit Service car service network, believes that average prices for spare parts will begin to decline, “if there are no new serious shocks on the market.” The key to determining the trend, in her opinion, will be the balance between the opposing factors of the aging of the car fleet, which stimulates the demand for spare parts, and its parallel decrease, which leads to a decrease in their demand.

Olga Nikitina