The sharp increase in demand for cars bypassed the segment of light commercial vehicles
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Sales of light commercial vehicles (LCV) in July, contrary to the general trend in the car market, were lower than the previous month. Growth could not be ensured even by the expectation of an increase in the cost of equipment due to the weakening of the ruble and the growth of salvage fees. On the one hand, both small and medium-sized businesses and large companies are in no hurry to renew parks during a crisis, on the other hand, a significant part of the supply has disappeared from the market, and it is represented only by Gazelles and the new Sollers line. Dealers and analysts primarily point to low demand, noting that consumers have not yet received replacements for models that have left the market.
The market for light commercial vehicles in July grew by 45.4%, up to 6.9 thousand units, calculated “Autostat” based on the data of the “Electronic passport”. This is 46.3% lower than in July 2021.
LCV is the only segment of the car market where sales showed a decrease compared to June (by 6.4%).
Thus, sales of trucks were 2.5% higher than a month earlier (13.1 thousand units), and cars – by 16.1% (almost 95.7 thousand units). In general, demand accelerated in July due to the expectation of an increase in waste collection from August 1 (which also affected LCV) and the weakening of the ruble.
“The situation with the supply in the LCV segment is still different from the passenger car market, which is growing not only with deliveries through parallel imports, but also represented by many new automakers that provide official deliveries,” says Andrey Gusev, Deputy Director of the Corporate Sales Department of Avilon. “In this sense, the speed of development and recovery of the LCV segment is still much slower.”
Sergey Udalov from Avtostat adds that the situation in the truck and LCV markets is also different: the volume of cargo transportation has increased, which gave a surge in demand for tractors, and construction is also developing, which requires the purchase of dump trucks.
Most of the LCV market (63%), according to Avtostat, in July accounted for the group GAS – sales of the brand increased by 60%, to almost 4.4 thousand cars. The best-selling model remains the Gazelle Next (2.7 thousand cars sold). After GAZ comes UAZ, whose total sales grew by 29% to 1.1 thousand units. The most popular model is the UAZ-3909 “Loaf” (479 cars sold).
UAZ is followed by a new line of Sollers under its own brand Sollers: 510 vehicles sold, 479 of which are Sollers Atlant. Sollers cars are based on the Chinese JAC. Also in the top 5 brands is Lada with its Largus, but so far it’s about selling the rest: AvtoVAZ will return to the production of Largus only in August, intending to produce 635 cars.
Before the crisis, the LCV market was divided between GAZ, Ford, Mercedes, VW and smaller players (Renault, Peugeot, Fiat), says Maksim Zlatokrylets, director of Rolf’s new car sales department.
“Today, in Russia, there is only one player in this segment that is understandable to everyone — GAZ,” he continues. only GAS.
Regarding the supply of cars through parallel imports, Mr. Zlatokrylets believes that “there is no particular interest in transporting such cars, since there is a narrow segment and expensive logistics (large cars)”.
There is no wide range of LCV equipment on the market, except for the Gazelle brand, Vladimir Zhelobov, director of the department for the purchase of Avtodom and Avtospectsentr, agrees: “Accordingly, the choice is limited and pent-up demand is formed,” he continues. “But customers do not want to spend money equipment that is subject to rapid wear and tear. LCVs delivered under parallel imports are significantly more expensive than customers’ expectations. Several companies have launched or are planning to launch LCV production, so it is likely that after their release we will see a surge in demand in this segment.”
At the same time, the effect of deferred demand still affected the market dynamics in the first half of 2023, ensuring growth, Andrey Gusev adds: “It cannot be ruled out that in the coming months this factor will continue to have an impact on LCV sales, but not so significant.”
Sergey Udalov also talks about the shortage of supply, noting that so far the players from China are not expanding their presence, “including because there are somewhat different requests for light commercial vehicles in China.”
In fact, no one came to the segments of Largus and foreign players, and the market shrank. “Those who bought Gazelles stayed on them. Small and medium businesses are probably experiencing difficulties, and e-commerce, where parks have grown after the pandemic, may not have such an urgent need, ”the expert concludes.
At the same time, CTT Group (a distributor of commercial and passenger vehicles) noted that slight fluctuations in sales from month to month may be associated, for example, with the delivery of a batch of cars to large customers in the previous month. They added that there is no supply shortage problem, “and domestic brands, and primarily Gazelle and Sobol, allow satisfying demand in various industries.”
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