Sales of new passenger cars and light commercial vehicles (LCV) in Russia fell by 63% in March, or 93,547 vehicles, compared to March 2021, according to data from the Association of European Businesses (AEB). A total of 55,129 vehicles were sold. For the first quarter, sales decreased by 28% to 277,332 vehicles, according to the association’s report.
Worse than last March, sales were only in April 2020, when non-working hours were announced throughout the country due to the spread of the coronavirus and car dealerships were closed. Then the market collapsed by 72% to 38,922 cars.
Among the 45 brands presented in AEB reporting, only three showed positive dynamics in March, and this was due to a very low base in March 2021. These are Chery Exeed (505 cars, an increase of 63%), Isuzu (153 units, an increase of 5.6 times) and Chevrolet (82 cars, almost double growth).
Traditional market leaders have lost more than 60% of sales. AvtoVAZ sold 12,289 cars (-64%), Kia – 6,336 (-68%), Hyundai – 4,909 (-68%), Renault – 4,072 (-65%), Toyota – 3,231 (-69%) %). Due to sales of Skoda (2,803 cars) that sank by 71%, GAZ Group moved up to sixth place, selling 2,886 vehicles (-36%). Even Chinese manufacturers this time, in addition to the sub-brand Chery – Exeed, showed a negative trend. Sales of Haval decreased by 44% to 1,573 cars, Geely – by 14% to 1,492 cars, Chery – almost five times to 498 cars.
For two months now, the AEB has not added a comment from the head of the relevant committee to the statistical sales report. The commentary was last published in January 2022, on behalf of the now former chairman of the association’s automakers committee and head of Porsche in Russia, Thomas Stärzel. In February, Aleksey Kalitsev, Managing Director of Hyundai Motor CIS, replaced him as head of the AEB profile committee.
In late February – early March, the availability of cars for consumers fell sharply due to the start of Russia’s special operation in Ukraine and its consequences for the economy. In the month since the recognition of the DPR and LPR on February 21, passenger cars in Russia have risen in price by 50-60%, car dealers interviewed by Vedomosti said. This is due to the fact that at least 83% of cars sold in the country and locally assembled, they still have a large share of foreign components that are purchased for foreign currency. The devaluation and instability of the ruble against the dollar and the euro were imposed by logistical restrictions and the suspension of local assembly by foreign automakers.
April-May 2022 may be worse than March in annual terms, Vladimir Bespalov, an analyst at VTB Capital, is pessimistic. “Dealer stocks of cars are running out, and factories have not yet been able to resume production. Prices remain prohibitively high, and for them buying a car does not make sense, only if the car is not needed from the point of view of production needs, ”he outlined the situation on the market in an interview with Vedomosti.
The main question now, according to the analyst, is whether factories will be able to resume assembly and how quickly they can do it. As soon as this happens, the situation will gradually improve – cars will begin to appear in showrooms, prices will be adjusted to more reasonable values, Bespalov believes. In a favorable scenario, sales of up to a million new passenger cars this year and about 100,000 more light commercial vehicles could be expected this year, the analyst said.
In 2021, according to the AEB, 1.67 million new passenger cars and LCVs were sold in Russia.