The Russian car market has “shuffled”, but remains weak

Such an expert opinion on the current state of the Russian car market was expressed during a press conference in the NSN by the vice-president of the National Automobile Union Jan Haytseer.

In his opinion, what is happening now can be called a car market with a big stretch:

“We have rolled back far, the domestic auto industry has fallen, and the prospects are still vague. (…) We have only a few domestic manufacturers left (these are UAZ, KAMAZ, VAZ), but their prices are also infinitely high, even sometimes they begin to seem prohibitive. Naturally, no one is lining up for their products yet. But perhaps this will happen in the future, as there will simply be nowhere to go.”

Speaking about the current market situation, Jan Heizeer explained:

“Today, firstly, we are trying to sell used cars, and this is what we call the car market; secondly, we sell a certain number of new cars (meaning foreign cars. – S.I.) remaining in the warehouses, which are transferred to us by representative offices; partially earned parallel import. There are few cars, but the demand for them is not the greatest, as the incomes of the population are falling. The market is therefore rather weak. It has already been “shuffled”: priorities have changed, brands have changed. It is clear that most foreign companies have left Russia, and their cars come here through parallel imports. There are Korean manufacturers left: in some form, obviously insufficient, they are now present.”

The niches vacated in the Russian market are occupied, according to him, by Chinese manufacturers, but so far their products remain a “beautiful picture”, behind which it is not clear what is behind:

“The Chinese auto industry is trying to fill empty niches, but we still don’t know what quality it is. We see a beautiful external picture, we do not see the insides, no one has described these insides, we do not see objective independent tests. Today, there are not enough Korean affordable cars, the budget segment.”

The topic of the lack of budget cars in the Russian market, first of all, was continued by another participant of the press conference – auto expert Ilya Ushaev:

“According to statistics, Russia lacks up to 2 million cars. Of these, if we talk about new cars, somewhere around 75%, and maybe more, there are not enough economy class cars – A, B, C, D. Previously, these were Japanese and German cars that were available for reasonable prices.”

According to his forecasts, the shortage of such cars may soon be aggravated by the shortage of original spare parts, for which, when they do reach the counter, a “wild markup” is made:

“Original spare parts are brought very little. A colleague from BMW recently said that they brought in several containers of original parts per month. Then they didn’t bring anything for several months. Now at least something is being brought in through parallel imports. The scheme works, but the margin in this case is wild for the end buyer, who purchases them for several hundred percent more.

According to experts, against this background, prices for a number of popular auto parts in Russia soared from 45-65% to 1.5 times, depending on the product. So, car pads went up in price by 65% ​​at once. For example, the cost of pads for Hyundai Solaris and Kia Rio has risen so much. Used car prices also began to rise. Since the beginning of 2022, used cars under the age of 5 have risen in price by an average of 28% to 2.47 million rubles. Cars in this age range have become more expensive than others, with SUVs and crossovers rising the most.

As Roman Timashov, Altufyevo Motorhome Service Director, noted, if the issue with consumables was resolved quickly enough using non-original high-level spare parts, then there are quite serious problems with body parts:

“There are problems with body parts, they are less interesting to carry, they cannot be carried “in your pocket”. I will give examples that could become memes – windshields of half a million and even a million. And people took advantage of this offer, they were forced to buy.

According to him, in general, there are already parallel imports of spare parts, but it is too early to talk about the stability and rhythm of the work of its channels:

“Those deliveries that we now receive, and they arrive on time, are probably rather an exception to the rule. Such a deficit, which was observed at the beginning of summer, is no longer there. The market corrects itself, but if we talk about numbers, they are as follows: there is information about the import of components for 2021 (then the volume of supplies was a little less than $60 billion), and the expected similar figure for 2022, taking into account parallel imports, which recently Manturov voiced, 4 times less (about 16 billion dollars). That is, it is obvious that there will be a shortage of spare parts, which implies an inflated cost for them. ”

Another, perhaps, not yet too obvious problem of the car market (one might say, a problem with a delayed effect) was pointed out by the vice-president of the National Automobile Union, Jan Haytseer:

“The buyer must understand that when he now comes to the dealership, he, unfortunately, sees the following picture: God forbid, if some car is there from the warehouses of representative offices (meaning the warehouses of foreign representatives. – S.I.) has been released. Such representative offices seem to have gone, but they seem to exist: some of them are trying to help dealers through the same parallel import. Not all of them are, but there are some. So, the buyer comes and sees that this car is really a dealership, that is, it was given away from the remnants of the representative, and this car was brought through parallel imports. And what does it mean – brought through parallel imports? This means that the guarantee does not actually apply to it. In the best case, the dealer will take some responsibility. But in most cases, we can see that the car is registered to a one-day company: that is, not to a company that has been selling cars for a long time, but to a temporary company,”

This, as Jan Heitzeer explained, is done in order to evade the claims of angry buyers in the future, who will demand warranty repairs through the courts …

Sergei Ishkov.