2023-07-06 22:57:52
New passenger cars will rise in price in the summer-autumn of 2023 by an average of 5–10% due to the continued appreciation of the main currencies used to purchase components and finished cars since June. This was told by car dealers, manufacturers and experts interviewed by Vedomosti. First of all, this may affect not the manufacturer’s recommended retail price (RRP), but the reduction of discounts and the cancellation of promotions that gained momentum in the first half of the year.
In June, as follows from the data of the Moscow Exchange, the ruble weakened against the dollar by 10.5% (or by 8.54 rubles), against the euro – by 13% (by 11.3 rubles), against the yuan – by 8.4 % (by 95 kopecks). On July 6, the dollar exceeded 93 rubles, the euro – 102 rubles. (for the first time since March 28, 2022), the yuan was trading near the mark of 13 rubles.
According to the general director of Avtodom, Andrey Olkhovsky, now almost all Chinese companies are engaged in calculations to update car prices. “I think that the growth of the dollar / euro / yuan will be priced in within two months. Chinese companies are more rigid in this issue than European ones. According to my feelings, the price increase will be in the range of 8-12%,” says the top manager. The first reaction of the market will be negative, but the practice of the last two years has shown that in 1-2 months there is an adaptation to new prices and a new reality, he added.
The growth dynamics of prices for official deliveries remained at the level of 2-3% per month in the first half of the year, recalls Renat Tyukteev, Deputy General Director for Sales of New Cars of Avilon. He expects the cost of new cars to rise even more by the end of the year. Provided that the main “contributor to the price” – the yuan – remains stable, the growth will not be sharp and will be about 2% per month, the source said. But if the downward movement of the ruble does not stop, then, according to Tyukteev’s forecasts, prices will be revised up by 3-5% already in July. In the meantime, according to him, importers are taking a wait-and-see attitude.
Exchange rate fluctuations will lead to higher prices, but usually manufacturers do not do it abruptly, says Alexander Istomin, director of Rolf Dmitrovka and Yakimanka. If the current values are fixed, then price increases cannot be avoided, but it is difficult to predict how much this will hurt sales, he states. “Over the past three years, we have seen demand that exceeds supply, and so far the price increase has not affected sales,” the source explains.
There is a rise in prices and will continue, agrees Vyacheslav Zhigalov, vice president of the Russian Auto Dealers Association. But it will not be, in his opinion, spasmodic. Zhigalov, in particular, draws attention to the increased competition between Chinese brands in the Russian market. Because of this, manufacturers introduce various discounts, which in total reach 20% of the price of the car, he explains. “At first, these promotional offers will be reduced. Next, you need to see how the ruble will behave. If by the end of the year it does not strengthen and the volume of supply on the market does not grow, then we can expect an increase in final prices by just these 20% without actual indexation of the RRP,” he believes.
Exchange rate fluctuations are built into the benefits of marketing programs, confirms a representative of Chery. The last adjustment was on July 1, he notes. Then the size of the maximum benefit remained at the level of up to 840,000 rubles. for a car of 2022, and for a car of 2023 it was reduced from 790,000 to 730,000 rubles, the source said.
The weighted average (taking into account the market share) cost of a new passenger car in Russia in the first half of the year amounted to 2.68 million rubles. – almost 13% more than at the beginning of 2023, follows from the data of Avtostat. For the first half of 2023, sales of new passenger cars grew year-on-year by 14% to 401,566 units, according to Avtostat data and the electronic PTS system.
Currency fluctuations are unlikely to affect the cost of cars in June and the first half of the year, says Sergey Udalov, executive director of Avtostat. According to him, consumers will see changes in the price tags in July and, first of all, this will affect cars imported through parallel imports (import without the permission of the copyright holder. – Vedomosti). They will rise in price, according to expert forecasts, by about 10%.
In January-May 2023, 171,500 new passenger cars and 178,500 used cars were imported to Russia, according to Avtostat data and the electronic TCP system. This is 2.7 and 3 times more, respectively, than in the same period in 2022. Moreover, in May 2023, out of 51,193 imported new cars, 75% were from China, and out of 37,407 used cars, 51% were Japanese. The share of parallel imports in May 2023 amounted to 16% of all cars sold, while a year earlier it was 10%.
Official importers will reflect exchange rate differences in August or September and, most likely, in a smaller volume, so as not to lose a client, Udalov believes. According to his estimates, officially imported cars from China will become 5-7% more expensive for the end buyer. Last but not least, the growth of the dollar and the euro will affect the domestic Lada, he adds.
AvtoVAZ has raised prices twice this year – since March and since May. The last increase was in the amount of 2–3% of the RRP, or 14,000–39,000 rubles. in absolute terms. A company representative told Vedomosti that new indexation “is not in the plans right now.”
Independent auto industry consultant Sergei Burgazliev believes car prices will rise “closer to 10%” as the ruble’s decline against major foreign currencies has not yet ended. This growth will be realized primarily due to the refusal of various marketing campaigns of manufacturers, the expert agrees.
Vedomosti sent questions to the Ministry of Industry and Trade.
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