In Russia, car sales have fallen. The decline in car sales was something no one expected. Premium class at an affordable price

At 17.3%, July was even more shocking. Car sales plummeted by 22.9%! It seems no one expected such a fall.

“Unfortunately, the contraction of the automobile market continued, picking up speed in July. Overall, the trend is alarming and unlikely to fundamentally change anytime soon. Of course, the Moscow Motor Show, which opens at the end of August, should have a stimulating effect on car sales, especially taking into account that autumn is a high sales season. At least that's what usually happened. But can this year be called an ordinary year?” Joerg Schreiber, Chairman of the Automobile Manufacturers Committee of the Association of European Businesses, ironically says. Moreover, with a high degree of probability it can be argued that the market has not yet reached the bottom. The decline will likely continue in the coming months.

Among the market leaders, Chevrolet was hit the hardest by the crisis - sales in June decreased by almost half (minus 23% based on the results of 7 months of 2014). Volkswagen dealers also found themselves in a difficult situation (-32% in July). AvtoVAZ lost a lot, but this no longer surprises anyone - minus 25%. One can also note a serious drop in demand for Mitsubishi (-42%) and Ford. Immediately minus 52% in one month, and now Ford, which was once one of the leaders of the Russian market, takes only 12th place in the overall standings (at the end of 2014, Ford has already lost 41% - this is the most serious decline among all more or less major market players).

However, there are companies that, even in the current conditions, manage to maintain their positions. And even increase sales! For example, Skoda was able to grow by 4% in June, and Mazda by 13%.

And once again it became clear that premium brands in Russia are not facing any crisis. The Mercedes-Benz passenger car division increased sales by 13% in July (and +18% for the year), demand for Lexus increased by 21% (+17% for the year), and Porsche added 29%.

In the “personal” standings, the leader is still the Lada Granta (11,819 units were sold in June). However, pay attention - Hyundai Solaris sold 9,778 cars! Moreover, every month the difference between these two models is steadily decreasing. This means that by the end of the year a foreign car may take first place in sales in Russia! Albeit of Russian production (for comparison, in July 2013 the difference between Granta and Solaris was completely different: 14,542 versus 9,482 in favor of Lada).

In third place is Kia Rio (6,853 units), Renault Duster (5,694 units) is in fourth place, and Renault Logan closes the top five with 5,630 cars. Next are Lada Largus and Kalina, Volkswagen Polo, Lada Priora, and in tenth place is the Toyota Camry.

SALES OF NEW PASSENGER AND LIGHT COMMERCIAL VEHICLES IN THE RF BY BRAND

Lada28 014 37 549 -25% 220 822 264 278 -16%
KIA15 303 17 099 -11% 109 276 111 969 -2%
Renault15 219 18 013 -16% 111 640 122 646 -9%
Hyundai14 461 14 753 -2% 104 035 104 219 0%
Toyota13 312 14 599 -9% 89 800 87 653 2%
Nissan9 136 11 605 -21% 91 484 75 352 21%
VW9 010 13 303 -32% 76 363 90 583 -16%
Chevrolet8 457 15 487 -45% 73 749 95 687 -23%
Skoda7 064 6 805 4% 49 111 49 652 -1%
GAZ com.avt.5 517 7 245 -24% 37 298 45 425 -18%
Opel4 926 6 551 -25% 38 440 46 144 -17%
Ford4 500 9 293 -52% 35 818 60 416 -41%
Mercedes-Benz4 323 3 835 13% 28 085 23 865 18%
Mazda3 743 3 300 13% 27 544 23 442 17%
Mitsubishi3 501 6 087 -42% 41 957 43 662 -4%
UAZ3 002 4 158 -28% 22 560 29 141 -23%
Daewoo2 841 3 908 -27% 26 860 31 182 -14%
Audi2 600 2 954 -12% 20 566 21 135 -3%
SsangYong2 421 3 651 -34% 13 844 19 516 -29%
BMW2 178 3 515 -38% 21 735 22 789 -5%
Lifan1 861 2 603 -29% 12 011 14 083 -15%
Land Rover1 716 1 715 0% 12 086 11 307 7%
Lexus1 575 1 298 21% 10 304 8 774 17%
Citroën1 426 2 925 -51% 12 461 16 772 -26%
Geely1 351 2 773 -51% 10 671 14 474 -26%
Peugeot1 338 2 907 -54% 13 506 20 464 -34%
Great Wall1 307 1 708 -23% 9 403 12 122 -22%
Honda1 278 2 246 -43% 12 424 14 520 -14%
Chery1 217 1 853 -34% 10 369 11 525 -10%
Suzuki1 146 2 551 -55% 11 048 16 372 -33%
Subaru1 146 1 304 -12% 9 346 9 929 -6%
Volvo1 053 1 021 3% 9 093 8 407 8%
VW com.aut.920 1 312 -30% 7 522 9 010 -17%
Mercedes-Benz com.aut.600 411 46% 3 851 2 416 59%
Jeep573 364 57% 4 460 2 413 85%
FIAT541 678 -20% 4 241 4 181 1%
Porsche385 299 29% 2 557 2 163 18%
Infiniti374 625 -40% 4 743 5 051 -6%
FAW253 461 -45% 1 934 2 329 -17%
MINI155 234 -34% 964 1 584 -39%
SEAT135 370 -64% 1 044 2 292 -54%
Jaguar135 175 -23% 981 938 5%
Changan112 - - 563 - -
ZAZ92 219 -58% 478 2 111 -77%
Haima87 37 135% 417 136 207%
Cadillac81 114 -29% 788 909 -13%
Isuzu74 20 270% 253 73 247%
BAW72 134 -46% 720 1 017 -29%
Acura64 - - 409 - -
J.A.C.58 - - 189 - -
Brilliance50 - - 232 - -
smart30 26 15% 186 108 72%
TagAZ14 170 -92% 105 282 -63%
Chrysler8 21 -62% 85 114 -25%
Alfa Romeo8 - - 37 - -
Luxgen2 - - 77 - -
Dodge2 26 -92% 26 147 -82%
Izh0 55 - 19 585 -97%
BYD0 0 - 5 100 -95%
Foton0 0 - 11 6 83%
Total180 767 234 365 -22.9% 1 410 606 1 565 470 -9.9%

SALES OF NEW PASSENGER AND LIGHT COMMERCIAL VEHICLES IN THE RF BY MODELS

1 GrantaLada11 819 14 542 (2 723) 1 GrantaLada83 294 98 787 (15 493)
2 SolarisHyundai9 778 9 482 296 2 SolarisHyundai65 352 66 491 (1 139)
3 New RioKIA6 853 7 651 (798) 3 New RioKIA54 033 51 887 2 146
4 DusterRenault5 694 7 348 (1 654) 4 DusterRenault46 761 48 058 (1 297)
5 LoganRenault5 630 4 289 1 341 5 KalinaLada39 902 40 870 (968)
6 LargusLada4 798 4 867 (69) 6 LargusLada39 718 29 569 10 149
7 KalinaLada4 436 3 789 647 7 PoloVW36 526 41 720 (5 194)
8 PoloVW4 389 7 000 (2 611) 8 LoganRenault30 335 30 180 155
9 PrioraLada3 429 4 882 (1 453) 9 PrioraLada28 282 36 763 (8 481)
10 CamryToyota3 122 4 207 (1 085) 10 AlmeraNissan27 335 4 484 22 851
11 New Cee'dKIA2 857 2 955 (98) 11 NivaChevrolet23 544 29 816 (6 272)
12 NivaChevrolet2 692 3 961 (1 269) 12 Octavia A7Skoda22 051 1 757 20 294
13 Octavia A7Skoda2 635 778 1 857 13 SanderoRenault21 413 26 044 (4 631)
14 4x4Lada2 605 3 431 (826) 14 RAV 4Toyota21 368 23 389 (2 021)
15 CorollaToyota2 582 1 812 770 15 4x4Lada21 281 25 320 (4 039)
16 RapidSkoda2 578 0 - 16 ix35Hyundai20 325 18 063 2 262
17 RAV 4Toyota2 489 3 474 (985) 17 CamryToyota19 309 20 465 (1 156)
18 CruzeChevrolet2 488 6 644 (4 156) 18 CruzeChevrolet18 769 31 296 (12 527)
19 SanderoRenault2 314 3 806 (1 492) 19 CorollaToyota17 573 14 443 3 130
20 ix35Hyundai2 238 2 859 (621) 20 QashqaiNissan17 373 19 388 (2 015)
21 AlmeraNissan2 196 1 548 648 21 FocusFord16 989 39 913 (22 924)
22 SportageKIA2 060 2 675 (615) 22 SportageKIA16 505 19 030 (2 525)
23 FocusFord2 056 5 749 (3 693) 23 New Cee'dKIA16 093 18 735 (2 642)
24 QashqaiNissan2 017 3 242 (1 225) 24 AstraOpel15 019 22 532 (7 513)
25 MokkaOpel1 938 490 1 448 25 OutlanderMitsubishi13 545 13 079 466

Sales of new cars on the Russian market in October 2015 fell by 40-42% compared to last year. Gazeta.Ru received such data from industry representatives a few days before the publication of the monthly report of the Automobile Manufacturers Committee of the Association of European Businesses (AEB). The decline in performance is observed in the vast majority of brands, with the exception of some premium ones.

Domestic cars traditionally rank first in terms of the number of cars sold.

During the month, 20.6 thousand new Lada cars were sold. However, this is as much as 46% less than in October 2014, when the Tolyatti auto giant sold 38 thousand cars.

In second place with a result of 14,422 cars was the Korean Kia. Compared to the same period last year, the company sold only 3 thousand fewer cars (in October 2014, Kia sold 17,392 cars).

The brand's sales driver remains the budget model Kia Rio, interest in which, thanks to its recent update and attractive price, is only growing: 9,017 cars sold, which is 27% more than in October 2014.

I just didn't get to second place. Brand sales dropped by only 8% and amounted to 14,145 cars. Other leading brands also continue to show declining sales. Thus, 10.8 thousand cars were sold (-35%), Volkswagen managed to sell 7.2 thousand cars (-30%).

Two popular Japanese brands dropped significantly: Toyota - 6.7 thousand (-48%) and Nissan - 6.1 thousand (-49%). Against the backdrop of very successful sales in recent months, UAZ also showed a negative result - 5 thousand vehicles (-27%). Skoda sold 4.5 thousand cars in October (-39%), Chevrolet - 3.5 thousand (-62%), sold 3,962 cars (-25%).

Premium brands suffered the least losses. In particular, they highlight the very strong position of Porsche, which shows last year’s sales level and even in some months goes “in the black” thanks to the new Macan crossover.

With a modest result of 126 cars, Cadillac showed a sales increase of 15%.

It will only get worse

“Last year, in November-December, there was a rush of demand for all cars at dealership centers, but now we can’t count on that, so sales in the coming months may drop by 50-60%,” notes one of the sources. —

In addition, not all dealers plan to launch traditional promotions with discounts and gifts this year, which again will inevitably affect sales dynamics.”

Gazeta.Ru experts explain the significant gap in figures between the current indicators and the same for last year as the effect of a high base. Thus, in the fourth quarter of 2014, a paradoxical situation arose in the automobile market: despite the fact that household incomes were rapidly falling, the demand for cars was growing, and this growth in interest was explosive.

“The population sought to get rid of ruble savings as quickly as possible in the wake of devaluation, and then we watched how car showrooms emptied within a matter of days,

— Andrey, Director for Auto Lending Development at Loko-Bank, tells Gazeta.Ru. “When comparing current sales levels with this period, it is incorrect to talk about overall dynamics.”

The expert does not expect a significant change in the downward dynamics of demand in the new car market.

“Deep-seated problems in the economy, as well as high volatility in the foreign exchange market, do not allow the population to return to long-term planning of their own expenses,” Ermakov notes. — Citizens are postponing their intentions to buy cars for the future. In general, the reasons for the decline in car sales, which emerged against the background of the development of the crisis in Russia, retain their influence.

And no positive progress can be predicted until the end of the year. At the same time, the premium segment is least affected by the crisis. There will be a demand for these cars.”

The expert explains the noticeable decline in sales of AvtoVAZ cars by the effect of deferred demand. According to him, consumers are waiting for updates to the car line and the release of new models, so in the first half of 2016 we can expect a significant increase in Lada sales. He is confident that this year's preferential car loan program will have a significant impact on supply from automakers.

“Car companies fought specifically for the budget segment in order to ensure the maximum level of sales in it,” says Ermakov. “This situation will continue throughout the duration of the program, but will not lose its relevance even after, since over the next two years it is the segment of budget cars that will demonstrate the greatest stability.”

In turn, the head of the analytical department of QB Finance explains the sharp drop in AvtoVAZ sales by the fact that the company does not have time to quickly supply technologically attractive cars to the market.

“AvtoVAZ’s only trump card is its low price, but people prefer to buy Korean cars, which cost a little more, but through lending, discounts and reliability they are gradually conquering the market,”

- Kipa says to Gazeta.Ru. — AvtoVAZ needs to learn to react more flexibly to changes in the market and change its positioning. The drop in sales is also due to the fact that traditional Lada buyers are in regions where the economic downturn is felt most strongly and where people are in no hurry to buy cars.”

The expert is confident that the sales situation has stabilized. Now people will wait until February - March to buy cars from last year at a discount.

The fall will continue without government support

“Compared to last year, in November-December we will see a very serious drop,” Maria Malinskaya, director of the Hyundai dealership Rolf Altufyevo, told Gazeta.Ru. — Jumps in the ruble exchange rate and the expectation of a new wave of price increases next year may trigger a short-term revival in consumer activity, but we are unlikely to see growth comparable to last year. The current sales volume will only be maintained with government support.

With the cessation of industry stimulation and, above all, with the winding down of the preferential lending program, we will see a new market collapse.

Experts agree that currently 30-40% of sales occur using government support programs.”

Malinskaya draws attention to the fact that the market is currently oversaturated with discounts, some models are sold at a “minus” and many dealers simply do not have the opportunity to further increase the size of the discount. “It is obvious that large dealers with a large brand portfolio have the opportunity to provide the client with a larger discount compared to small colleagues in the market,” Malinskaya noted.

Less demand means fewer jobs

Automakers began to respond to the fall in demand from buyers a long time ago. One of the forced measures was the reduction of personnel at Russian enterprises and the reduction in the number of work shifts. Nissan was one of the latest to announce its intention to lay off 500 employees at its plant in St. Petersburg. This is almost a quarter of the entire staff. About 400 more people will be laid off at Ford, the local trade union is confident. AvtoVAZ previously issued a statement about reducing labor costs.

With prices for new cars rising in recent years, many buyers preferred to go to the secondary market, where they can find a car to suit any budget. As a result, this segment turned out to be quite resistant to the crisis: sales of used cars showed a decline only in 2015, and since then the demand for them has been steadily increasing. However, the rate of this growth is significantly lower than in the new car market, where it has been measured in double digits since last year. Thus, in 2017, Russians bought 5.3 million used cars - only 2.1% more than a year earlier. And although in quantitative terms the secondary car market is more than three times larger than the primary one, it can be stated that some consumers today are returning to their dream of buying a new car. Therefore, sales of used cars will continue to grow, but at a more moderate pace.

“Used cars are still much more popular among Russians than new ones. However, factors constraining the sales of used cars are also present: it started on the primary market, the supply of fresh cars under 3 years of age has decreased - many motorists have increased the period of car ownership,” comments Sergei Litvinenko, head of Avito Auto.

In turn, Denis Eremenko, director of the PodborAvto company, notes that the return of consumers to the new car segment is, in particular, due to good discounts on trade-in programs, which dealers have begun to actively develop recently. In general, the dynamics of demand in the secondary market is within the statistical error, and there is no talk of any growth today.

Law of communicating vessels

According to the basic forecast of the Autostat agency, in 2018 the secondary market will grow by 3.2%, to 5.47 million cars. In a year, the used car market will add another 1.5% and reach 5.5 million units. The growth rate will continue to decline, and in 2020, sales of used cars will amount to 5.6 million units. Thus, after five years of recovery, the second-hand segment will never be able to reach the pre-crisis level of 6.1 million cars. As stated in the Autostat study, the formed pent-up demand, as well as the inevitable increase in the fleet, create the prerequisites for the growth of the secondary market in the coming years. At the same time, the continuing rise in the cost of living in the absence of growth in real incomes may force Russians to postpone expensive purchases, which include a car, indefinitely. This will lead to an increase in the period of car ownership and, as a result, a decrease in sales of used cars.

Rolf Group also predicts growth in the used car market in 2018, especially in the segment up to seven years old, which official dealers are actively working with. This will be a consequence of the emerging increase in sales of new cars, because the volume of the secondary market depends not only on the size of the country’s vehicle fleet, but also on the dynamics of sales of new cars. According to the director of the Blue Fish used car sales division of Rolf Group of Companies, Alexey Barinov, there are not many “primary” transactions on the market now, when the buyer chooses his first car. This means that with the purchase of a new car, he sends the previous one to the secondary market. The number of cases where a car is sold and nothing is bought in return is also expected to decrease - such sales were not uncommon at the height of the economic downturn.

However, with the end of state support programs and a possible increase in prices due to the next indexation, the new car market will face a reduction in demand, which in a few years will be reflected in the secondary market, says CarPrice CEO Denis Dolmatov. However, a decline in sales of used cars in general is unlikely, but certain age segments may go into the negative in the near future. “First of all, this concerns “three-year-olds,” because in 2015, sales of new cars dropped significantly, which is why now significantly fewer cars aged three years will be introduced into the secondary market. And a reduction in supply will inevitably cause prices to rise,” warns Denis Dolmatov.

Young people gain their worth

Meanwhile, last year "three-year-olds" showed compared to other age segments - by 9.6%, according to Autostat estimates. This is due to the fact that since 2014, new cars began to rise in price, and now they are entering the secondary market. Also, price increases were recorded for cars aged two (+3.8%) and four (+5.2%) years. At the same time, old cars (10 years and older), in addition to the fact that their number on the market is increasing significantly, on the contrary, they are becoming cheaper (-1.3%). In general, the weighted average cost of a used car in December 2017 was 561 thousand rubles, which is 1.9% less than a year earlier (572 thousand rubles). At the same time, the price reduction is primarily due to a change in the structure of the secondary car market towards older cars.

Avito Auto statistics confirm this trend: the average price for all published advertisements for the sale of cars in 2017 decreased by 9% - to 511 thousand rubles. At the same time, buyers were most actively (in 65% of cases) interested in cars older than seven years, which is explained, first of all, by their relatively low average price - 284 thousand rubles.

According to CarPrice, the average price decline last year was 0.8%, which indicates the stability of the budget for purchasing a car. “People are ready to spend no more than last year - around half a million rubles. This amount is comfortable for many because it allows you to do without a loan. However, a slight upward correction in prices is quite possible. The reason may be new credit programs for buyers of used cars,” notes Denis Dolmatov. In his opinion, fresh used cars purchased in 2015 at new post-crisis prices will be sold more expensive than now. But on cars that are 10 or more years old, this rise in price will not be reflected in any way, since the cost there is affected only by the condition, and not by the price for which the car was once purchased new by one of the previous owners.

Aged a lot

But Rolf Group predicts a gradual increase in prices on the secondary market, and it will affect cars of any age: prices for new cars continue to rise, and prices for used cars are gradually rising behind them. “At the same time, it is logical that buyers who do not have the necessary amount to buy a new or “young” car are forced to choose from more affordable, and therefore older, options,” argues Alexey Barinov.

Indeed, in the face of falling real consumer incomes, the demand for old cars is growing every year. There are millions of people in the country who need a car, but do not have enough money for a new one, and the only alternative for them is to buy an old car for 200–300 thousand rubles. Last year alone, more than 2.65 million Russians bought cars older than 10 years. As a result, the share of such cars in the secondary market for the first time exceeded 50%, the Autostat agency states. For comparison: before 2014 it was about 40%, and in the crisis years of 2015–2016 it increased to 44–45%.

According to Anton Demkin, sales director at Avilon-Trade, this trend is primarily due to cars under three years of age, since many car owners have extended their car ownership due to a lack of money to replace the car.

In turn, CarPrice predicts that the share of cars older than ten years will continue to grow until prices for new cars stabilize. After all, the demand for “decades” is maintained largely due to the continuing rise in price of new cars, which is also driving up prices for fresh secondary cars.

Korean breakthrough

Meanwhile, the brand structure of new car sales in recent years has gradually begun to influence the balance of power in the used car segment. Thus, Korean Hyundai and Kia are rushing ahead, which last year were able to overtake Chevrolet and Volkswagen in sales of used cars, respectively. And if Hyundai has only Toyota and Nissan ahead, which still maintain a significant lead, then Kia should overtake Ford this year.

Top 10 brands on the used car market, pcs. (data from Autostat)

№ Brand 2017 Change, %
1. Lada 1 442 975 -0,2
2. Toyota 586 528 -0,6
3. Nissan 284 587 3,1
4. Hyundai 242 116 10,1
5. Chevrolet 229 480 3,4
6. Ford 207 735 2,4
7. Kia 201 826 15,3
8. Volkswagen 201 722 6,5
9. Renault 175 812 9,5
10. Mitsubishi 160 448 -1,5
Total 5 301 190 2,1

The bestsellers of these brands are also improving their positions in the sales rankings: Solaris at the end of 2017 for the first time entered the top three best-selling used foreign cars, becoming more popular than sedans such as Toyota Camry, Renault Logan and Daewoo Nexia. And Kia Rio left behind Volkswagen Passat and Mitsubishi Lancer last year. By the way, Passat is so far the best-selling used car from Volkswagen, but in the near future this status will be taken by the Polo sedan, the sale of which is gaining momentum in the secondary market. The bestsellers among used foreign cars remain the Ford Focus and Toyota Corolla, despite the fact that their fleet has been very poorly replenished for many years.

Top 10 models on the used car market, pcs. (data from Autostat)

№ Model 2017 Change, %
1. Lada 2114 155 503 -0,8
2. Lada 2107 141 172 -3,2
3. Ford Focus 132 731 2,6
4. Lada 2110 119 413 -4,1
5. Lada 2170 105 659 6,2
6. Toyota Corolla 102 172 -1,7
7. Lada 4x4 97 475 -0,9
8. Lada 2112 88 232 -2,5
9. Lada 2115 87 374 -0,6
10. Hyundai Solaris 79 637 27,6
“The Volkswagen Passat and Toyota Corolla have sold well for many years, and were also imported from abroad with used cars. The share of these cars in the fleet is quite large, and so far they remain bestsellers. Ford Focus also retains the leadership position gained in previous years during the release of the second generation of the model. However, in the near future the market will be replenished with young models of the budget B+ segment, and soon they will take first place in the sales structure,” comments Alexey Barinov.

According to Denis Dolmatov, the sales leaders of recent years - Hyundai Solaris and Kia Rio - need time to displace the bestsellers of the late 2000s, but sooner or later this will happen.

PricewaterhouseCoopers, the automobile market in Russia may shrink by 35% this year. "Sekret" asked Sergei Udalov, executive director of the analytical agency "Avtostat", to tell what the market should expect and who will win in this situation.

What's happening in the car market

Almost everyone is in a difficult situation. Car prices have increased significantly: car owners who were ready to change their car have now decided to wait another year. Sales are going on, but at a very low level - we haven’t gotten used to the new prices yet. The issuance of loans has dropped to a minimum.

The situation is different for brands. This depends on the share of the Russian market in global sales of the brand, on the composition of the owners and the format of presence in Russia. SsangYong is not leaving the market, but will most likely switch from assembly at a Russian plant to imports. Despite the small market volumes, it is profitable for them to sell and assemble cars that have already been ordered. Perhaps then they will simply import, because with a small assembly volume it is completely ineffective to maintain personnel, assemble cars and provide logistics.

The departure of General Motors is, in my opinion, not only an economic, but partly also a political decision. The Russian market has always been considered significant for the American corporation. Even during the 2009 crisis, Chevrolet and Opel shared 12.3% of the market. And although GM experienced a serious drop in sales in 2014, this figure remained at 8% - this is still a large volume. So, if the political situation normalizes, GM may return to Russia. Although reputational losses in this case cannot be avoided.

**The car market in Russia may decline by 35%** this year **by 50%** in 2009 the market for new cars fell, and for secondary cars - by 20%

Ford's sales dynamics are no better than GM's, but nevertheless they are not going to leave the market. In the last crisis, Ford independently got out of financial problems, and GM took advantage of government assistance, which once again proves the political motivation for leaving the market.

For Japanese Honda and Suzuki in relation to global sales, the Russian market is very small. For us, these are rather niche brands. Depending on the willingness of Japanese brands to put up with losses in Russia, these brands will decide whether to stay or not. They have no production in Russia.

But most European brands are ready to support a dealer network in Russia. They raise prices very gradually, without immediately trying to compensate for the rise in currencies. The same BMW says that they are ready to maintain today's prices for their cars, despite the fall in profits and margins. Prices for new cars will stabilize and will decline over time, but not much.

Photo: Aleshkovsky Mitya/TASS

How the departure of General Motors will affect the market

Chevrolet and Opel have a total of 173 dealership centers in Russia, and it is clear that this will deal a blow to them. Dealers will continue to service Chevrolet and Opel cars, but it will be more difficult for them to make money on the service - the bulk of their revenue comes from car sales. It is impossible to say for sure whether the price of service for these brands will increase: dealers, on the contrary, will be more free to use spare parts, because GM’s strict requirements are unlikely to apply after their departure from Russia. Everything will depend on the economic situation of individual dealers, who can lower or increase the cost of servicing Chevrolet and Opel cars.

Other market players will be happy to fill the vacated niche, but the departure of Opel and Chevrolet is unlikely to in any way affect prices. The place of Opel and Chevrolet will be taken primarily by the Korean brands Hyundai and Kia. Partly, Volkswagen, Toyota, Škoda. Some consumers may switch to the Russian Lada.

Will Russians be left without foreign cars?

The situation cannot be called a full-fledged crisis. A mass exodus of foreign producers is not expected. Our market is large, even with today’s sales volumes, foreign companies are ready to make strategic decisions and maintain a presence in the market. Even if it falls all this year and does not rise until 2018.

Many dealers and manufacturers were prepared for today's situation thanks to the experience of 2009, when the market decline was unexpected. Large players without a serious credit load will be stable. Regional dealers will have the hardest time, especially with brands for which sales are falling sharply.

In recent years, most dealers have paid more attention to customer service, including after-sales service. Also, many brands and dealers began to independently develop sales of used cars. The three components of today's automobile business are new car sales, service and used car sales. Those who have worked seriously in this direction now have a more stable situation. Such players will be able to develop further and, perhaps, even buy someone.

Photo: Mikhail Japaridze/TASS

How will the situation affect the secondary market?

The used car market is more stable: it is also experiencing a decline, but it is much smaller. For example, in 2009 the new car market fell by 50%, and the secondary market - only by 20%. Here the turnover continues: someone sells their used car and buys a new one on the secondary market. In large cities, people are ready to sell and buy used cars through dealers, because they are accustomed to high-quality and professional service. You can already observe an increase in sales volume for some players by more than 2 times. When dealers enter the secondary market, they are willing to reduce the price of cars, since the sale of used cars, to some extent, becomes an assembly line. It is clear that in January-February the secondary market declined sharply, but now prices will level out. The market will determine for itself a more or less adequate price for used cars.

What are the prospects for the Russian automobile industry?

Now dealers and manufacturers need to use all possible methods of interaction with the government and their headquarters to create a situation in the market that is understandable to consumers. Here, the general state of the economy, the political situation and possible preferential lending programs will play a very important role. The Ministry of Industry and Trade is ready to adjust agreements on industrial assembly. From the same GM it demanded the production of 360,000 cars by 2018, which is now unrealistic, so I think that adjustments to the previously signed agreements on industrial assembly, primarily in terms of the timing and volume of localization, are still possible.

According to my estimate, in a normal situation the volume of the Russian market is 3 million passenger cars per year. The fall this year could be 30–50%.

Cover photo: Mikhail Japaridze/TASS

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Who is helping the market recover, which programs turned out to be the most effective, how prices will change and why forecasts for the coming year are not very optimistic

Last year, 2017, was remembered for the market turnaround, when the seemingly endless decline in sales gave way to full-fledged growth. The final results of the year have not yet been summed up, but according to the results of 11 months, according to reports from the Association of European Businesses, 1.43 million cars were sold - 12% more than in the same period last year. Experts are confident that by the end of 2017 the market will definitely exceed the 1.5 million car mark, exceeding the sales level of 2009.

Autostat agency analyst Azat Timerkhanov claims that there were no surprises, and in general, forecasts for market growth were fully justified: “A year ago, we gave a forecast for the market at the level of 1.45-1.5 million and for growth of 10-15%. Now we are seeing growth of 12%, and by the end of the whole year the market will come close to 1.5 million cars.”

The locals themselves

For manufacturers with local production, the increase was even greater. Thus, sales growth of the Lada brand amounted to 17%, which helped the manufacturer achieve a market share of 20%, and this is the brand’s best result over the past six years. The increase in the Renault brand over 11 months was 18%. The company's press office noted that this result was made possible thanks to the implementation of a local production strategy.

In addition, the French company considers its experience of organizing online sales successful - it managed to sell more than 10 thousand cars via the Internet. And for the Mitsubishi brand, the growth was already 33%, largely due to the expansion of the model range, an increase in the load on the assembly plant near Kaluga and a reduction in prices for localized models.

“Serious pent-up demand has been building since 2014, and now people have finally begun to replace the cars they bought in 2011-2012. This process began in the past year and will continue next year,” predicts Azat Timerkhanov.

Possible on credit

Another catalyst for the market was state support programs, the expert explains: “Due to state support programs, which were expanded by the end of the year to include first and family cars, the share of credit sales increased significantly and exceeded 50%, which had not been the case for several years.” Thus, with the help of credit programs, a third of Renault cars were sold, and for Hyundai this figure reached 52%.

Kira Kaddaha, a representative of the dealer aggregator Autospot.ru, believes that the key factor in the development of the market was government support, since benefits were strengthened in 2017.


“Firstly, the maximum cost of a car for the preferential lending program was increased to RUB 1,450,000. instead of the previous 1,140,000 rubles. Secondly, since 2017, buyers have the opportunity to purchase a car without a down payment. Thirdly, the interest rate was reduced,” the expert lists.

Kaddaha recalls that the maximum possible rate for the borrower was limited to 11.3% per annum. Representatives of AvtoVAZ, in turn, especially noted the effectiveness of the trade-in program, under which 40% of cars were sold, and at Nissan more than 50% of transactions were completed using trade-in.

It is the focus of state support that Alexey Shilykovsky, Sales Director of Jaguar Land Rover Russia, explains the more modest growth in the premium segment: “Government support and demand are primarily aimed at local production and cars in the mass segment - growth there is obvious, and it will continue. In the premium segment, most likely, we cannot expect a significant increase in sales volumes now.”

In addition to government programs, dealers now have new financial instruments. In addition to leasing for individuals, dealers began to actively promote loans with buybacks and small monthly payments. Such a program, launched by the Renault representative office, helped sell about 5,000 cars. Hyundai operates a similar scheme and accounts for 40% of all loans issued.

“One of the factors that influences customer choice is the availability of financial instruments and programs,” confirms Yulia Tikhonravova from Hyundai.

Nissan representative Roman Skolsky draws attention to the ease of obtaining a loan: “Special financial programs are available using a one-stop-shop method - decisions on financing conditions are made in 20 minutes with the ability to receive funds without providing financial statements directly at the dealership.”


The market result could be even better, says Timerkhanov, but sales are held back by purely economic factors: “It all comes down to the economy. The price of oil remains at approximately the same level, the domestic currency avoids sharp fluctuations, but real incomes of the population are not growing.”

For the same reason, experts give more cautious forecasts for 2018. Purchasing power will decrease, Kira Kaddaha assures, and local production volumes will fall: “The lull will be associated not only with rising prices, but also with the fact that the period of deferred demand will end, due to which 2017 was so successful for almost all automakers.”

Cars and prices

In 2017, car prices grew very moderately. According to the Autostat agency, following the results of 11 months, the weighted average price for new passenger cars increased by almost 2%, to 1.33 million rubles. Thus, the price increase for the Lada model range was 3%, and the Skoda office assured that the brand did not make significant changes to the price lists during the year. Prices for Jaguar and Land Rover models have not changed. Nissan adjusted prices in line with inflation, increasing them by 2-3% depending on the model.

At the same time, not all manufacturers were able to fully make up the exchange rate difference, says Timerkhanov: “From August 2014 to November 2017, car prices increased by 48%. And foreign currencies grew more significantly against the ruble: the dollar by 76%, the yen and yuan by 60%, the euro by 50%.” A representative of Jaguar Land Rover believes that it was impossible to fully compensate for the exchange rate difference.


The remaining exchange rate difference is not the only reason for the upcoming increase in car prices that analysts are waiting for. “First of all, this is due to inflation and changes in excise taxes, as well as changes in model configurations when changing model years,” says Alexey Pochechuev from the Skoda representative office.

Managing Director of Kia Motors Rus Alexander Moinov predicts growth at 5% only for the inflation component.

Since the new year, the recycling fee has increased by 15%, which a year ago had already increased by 65%, and excise taxes on passenger cars with engines with a capacity of over 150 horsepower have also increased. This affected high-power vehicles most of all. For example, excise tax for cars with a power of more than 300 hp. is 1218 rubles. for 1 hp, that is, in fact, the buyer of such a car will have to additionally pay more than 300 thousand rubles. customs duties.

“The government decided that it was necessary to raise excise taxes on powerful engines, and on the most powerful of them - by more than double. Accordingly, the price tag will rise due to an increase in excise taxes levied on automakers, which they are forced to include in the price of vehicles,” explains Kira Kaddaha. And the government expects to receive 223.4 billion rubles from recycling fees in 2018, and this money, the expert says, will ultimately also fall on buyers.


Prices will continue to rise, but the growth will not be as serious as during the crisis, Azat Timerkhanov is sure. “On average we expect prices to rise by 2-3%. More specific figures depend on the degree of localization,” says the expert.

It is possible that even negative expectations from the economy may stimulate producer prices to increase. BMW and Cadillac have already announced price increases in the new year - the Bavarians increased the cost of cars by 2.5%, the Americans by 6-8%. According to the website, Porsche and Mercedes-Benz will also adjust their price lists in the new year.

Cure for Depression

Taking into account all these factors, the Autostat agency expects that in 2018 the market will continue to grow, but only within 10%. However, demand may decline in the second half of the year, says Timerkhanov: “The period of presidential elections will be accompanied by an injection of money supply, which allows people to invest more actively in purchases. This will be a temporary effect that will persist in the first half of the year. The market will decline in the second half of the year, especially given the relatively high base of 2017.”

Hyundai representatives also expect that in 2018 the market will grow by 10% and reach a volume of 1.75 million vehicles. And Natalya Kostenok from the Russian office of Mitsubishi believes that growth of 10-13% will be possible only with continued subsidies from the state.

Experts unanimously consider the economic situation to be the most important factor for the market. Everything will depend on the ruble exchange rate and oil prices, says Kira Kaddaha: “According to the forecasts of the Ministry of Finance, the average annual cost of Brent oil in 2018 may be $40 per barrel. The Ministry of Finance included in the country's budget the dollar exchange rate of 69.8 rubles. This is almost 10 rubles. or 16% higher than in the last 6 months. The ruble will become cheaper along with oil, and there is a high probability that 2018 could plunge the car market into depression.”

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