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"Lada", "Chinese" or used "Japanese". Such a choice now faces a potential buyer of a car in Russia. The departure of Western manufacturers has radically changed the auto business, assortment and prices in the Russian automotive market. Chinese brands continue to conquer the empty niche of the new Renault and Volkswagen. And those who cannot afford or do not like the "Chinese" have to dodge to buy a car.

The departure of Western automakers from the Russian market has led to fundamental changes in the Russian automotive market.

According to "AUTOSTAT", the most bought car in Russia now is Lada Granta. It is followed by the off-road cars Lada Niva Travel and Lada Niva Legend by a wide margin. Then in the model rating are the "Chinese": Chery Tiggo 7 PRO, Haval Jolion and Geely Coolray. Cars of the Lada Vesta family are inferior to the Chinese and occupy only the seventh line. Next come the Haval F7 crossover and Geely Atlas Pro. Closed the top ten UAZ "Patriot". As you can see, the top 10 best-selling cars consist exclusively of domestic and Chinese models.

The share of the Russian automotive industry in the domestic market is growing for obvious reasons. “The first is the departure of Western brands and the rise in prices for cars of these brands. Car dealerships sold cars from warehouses, but now they are almost empty. Prices also had an impact - for cars produced in the EU, the USA and Japan, the cost increased by more than 50% since the beginning of the year, and against the backdrop of economic changes in the country, buyers have reduced spending on large purchases.

Moreover, in the first half of the year, loan rates rose to 22-24% per annum against the backdrop of an increase in the key rate to 20%,” says Fedor Sidorov, founder of the School of Practical Investment.

In addition, Russians who wanted to buy a car began to make a choice in favor of the brands that remained on the market, fearing that there would subsequently be no spare parts for the purchased car of a Western brand, and their maintenance would become problematic. But this will not happen with Russian brands, and it is believed that it is easier to repair them, adds Sidorov.

The niche of Western manufacturers that left the market is occupied by Chinese companies.

Since the beginning of the year, the share of Chinese cars in Russia has already tripled, says a spokesman for the Avtodom Group of Companies.

In 2022, 120,000 Chinese brand cars were sold, and their share grew from 3.7% in the first half of the year to 33% in the second, notes Andrey Olkhovsky, CEO of Avtodom Group of Companies. And in 2023, market participants are waiting for the continuation of the doubling of the share of the “Chinese”.

Thus, Olkhovsky believes that the share of sales of Chinese cars in Russia will reach 60% this year. The Russian Automobile Dealers Association (ROAD) predicts that by the end of the year 250,000 Chinese cars will be sold in Russia against 124,600 last year.

Russian cars in 2023, according to forecasts, will remain market leaders. Their sales will amount to 440 thousand units, another 100 thousand cars will be occupied by foreign cars imported through parallel imports, ROAD predicts.

“Manufacturers from China are actively developing their representative networks, opening spare parts warehouses and modern service centers. Taking into account the plan to expand the presence of Chinese companies in Russia, cars from China have no real competitors here for a number of models.

Chinese cars have long ceased to be synonymous with cheap cars. According to Avtostat, there are practically no cars left in the top 10 most popular Chinese models on the Russian market, the price of which would be less than two million rubles.

The only exception is Haval Jolion, its cost starts from 1.899 million rubles in the minimum configuration. The minimum weighted average price in the top ten in terms of sales was recorded for Chery Tiggo 4 (2.139 million rubles). Next in ascending order is Haval Jolion (2.252 million rubles) and OMODA C5 (2.567 million rubles). Already in the eighth position of the rating is the model, the weighted average price of which has stepped over 3 million rubles - this is Geely Atlas Pro, and Chery Tiggo 8 Pro Max and Exeed TXL close the top ten, with an average price of more than 4 million rubles. So today, cars from the Middle Kingdom are already an expensive pleasure.

The second trend in the Russian car market is the sale of Western models imported into the country through parallel imports. However, there is no surge in such sales. Because this not only significantly increases the cost of the goods, customers are also afraid of problems with spare parts. Therefore, this channel mainly serves wealthy clients. “The volume of deliveries of European brand cars through parallel imports is not large, since it is more profitable to supply cars of the premium segment and luxury class, which have a higher margin, this way. The average cost of cars that are imported through parallel imports is 3-5 million rubles. On average, the delivery of each car takes at least 400,000 rubles, excluding excise tax and VAT,” says Olkhovsky.

In such conditions of shortage and diversity of brands and models of cars, the interest of buyers in purchasing used cars, including those from abroad, has seriously increased. In total, about five million used cars were sold in Russia in 2022. “There were eight used cars per new car, while in 2021 this figure was one in four. The number of sales of new cars over the past year amounted to 600 thousand cars, and taking into account the long service life, breakdowns and accidents in our country, more than one million cars were out of use. This fact, as well as restrictions on the supply of foreign cars, explain the increased demand for used cars in the domestic car market in early 2023,” says Olkhovsky. 

According to the Avtostat agency, in the first two months of 2023, 755.4 thousand cars changed their owners in Russia. This is 5.7% more than in January-February 2022. Moreover, the list of the most bought used cars practically does not change. The leader in the "secondary" is still the domestic Lada, then the Japanese Toyota, the Korean brands Hyundai and Kia, and the Japanese Nissan closes the top five. And the most popular model among used cars is the Ford Focus, the second line of the rating belongs to the hatchback Lada 2114 (Samara-2), followed by the Korean Hyundai Solaris and Kia Rio, and the fifth place is Lada 2170 (Priora).

Another trend is that they began to carry used cars from abroad. Why did this business begin to appear, because it is clear that the cost of such a car will include both the exchange rate difference and logistics costs?

This is due to the technical condition of the vehicles. The Russian climate, the quality of roads, gasoline and fuels and lubricants lead to faster wear of a car in the domestic market than in other countries,” explains Olkhovsky. Therefore, it is better to buy new cars in Russia - they will last longer. In addition, some customers want to buy a used car in an official showroom in order to protect themselves from scammers. However, many official dealers have a limited range of used cars. Buying from abroad solves the problem with the lack of the desired model in the domestic market.

Russians are most in demand for used cars from Japan - and there are good reasons for this. This is the quality of their assembly and reliability, as well as a short service life.

“Japan has a very high tax on cars with a mileage of more than 100,000 km, so owners put cars up for auction after two to three years of use,”

According to the expert's forecast, there are no prerequisites for reducing prices for used cars - on the contrary, in 2023 the trend towards an increase in their cost will continue.

 “This trend is associated with the rise in the cost of new cars, as well as the growth of the exchange rate. The greatest demand was noted for machines with a service life of up to five years, therefore, the growth in their cost will continue,” says Olkhovsky.

In the first month of spring, the experts of the agency "AUTOSTAT" revealed a decrease in prices for used cars. The average price of passenger cars with mileage in March 2023 amounted to 1.349 million rubles, according to the data of the Avtostat agency. This is 1% (or 13.5 thousand rubles) less than in February. But if we compare the figure obtained with what it was a year ago in March 2022, then used cars have since become more expensive by 19% (or 211 thousand rubles).

The sellers are trying to find new forms of trade in any case. The used car market will continue to play a significant role in auto retail.

Source: https://vz.ru/economy/2023/4/3/1205576.html