Sales of new passenger cars in Russia in 2023 will grow by 7% to 670,000 units, but then they will grow by an average of 22% per year until 2027 inclusive. Such a forecast is presented in the review of the Russian car market at the end of 2022 and the prospects for its development, prepared by the consulting company Trust Technologies (Tedo; formerly PwC in Russia). Vedomosti got acquainted with the document. According to the analysts’ baseline forecast, sales will reach 1.49 million units in 2027.
The basis of sales in 2023 in the baseline scenario will be domestic brands (302,000 units) and imported cars (317,000 units), only 51,000 vehicles will be Russian-made foreign cars. “The implementation of the baseline scenario will depend mainly on the stability of the geopolitical situation, the development of parallel imports and the stability of the price level,” notes Tedo. The share of domestic brands is expected to grow from 30 to 45% of the total market.
In the optimistic scenario, passenger car sales will grow by 28% in 2023 to 800,000 units. But then they will grow at a slower pace – at the level of 18% per year – and will reach 1.55 million cars in 2027, the review says. The implementation of such a scenario is possible in the event of the emergence of new players on the market that localize production in Russia. Thus, in Tedo’s optimistic forecast for 2023, the number of locally assembled foreign cars in sales should reach 181,000 units.
The final result of the car market in 2023 will be affected by the absence of geopolitical shocks, disruptions in the supply of components and the development of new channels for this, as well as the lack of growth in effective demand and high car prices, analysts believe.
At the same time, under any of the scenarios, car sales will be able to approach the level of 2021 (1.5 million cars) only after five years, in 2027, follows from the review.
The lowest point in the market statistics not only in recent years, but also in the entire recent history of the country was 2022, when due to the CBO and the stoppage of the production of all foreign cars in the country, except for Chinese ones, the market fell by 59% to 626,300 cars. But in money terms, as follows from the Tedo review, sales did not decline so much – by 41% to 1.65 trillion rubles. Analysts attribute this to an increase in the average price of all categories of passenger cars. According to Avtostat, their prices increased by an average of 17% to 2.33 million rubles. last year excluding dealer markup.
Prices for auto parts also rose last year. According to Evgeny Ufimtsev, president of the Russian Union of Motor Insurers, prices for this category increased by almost 20% in March 2023 compared to March last year. His words are given in the message of the information project “OSAGO: public expertise”.
The demand for auto components and spare parts for cars will decrease by 2% in money terms in 2023 and amount to 2.58 trillion rubles, the review notes. But then this market will grow at an average rate of 5% per year, Tedo predicts. In 2027, this figure should reach 3.1 trillion rubles.
Tedo’s estimates for the new car market are more pessimistic than other analysts’ estimates. In particular, the basic forecast of Avtostat for 2023 assumes the sale of 780,000 such cars, which is almost a quarter more than last year. In the optimistic scenario, the analytical agency expects the market to grow by 39% to 870,000 vehicles. The Association of European Businesses, which counts sales of passenger cars and light commercial vehicles together, forecast a 12% increase in sales in 2023 to 770,000 vehicles.
Market dynamics in the first two months of this year is still disappointing. According to Avtostat, sales of new passenger cars decreased by 45% in annual terms to 101,379 units. February 2023 was the last month in which the relatively high base of last year has affected the market dynamics. At the end of February 2022, CBO began in Ukraine, and already in March, sales began to plummet.
According to auto expert Vladimir Bespalov, sales of new passenger cars in 2023 will amount to 790,000 units. But the potential of the market is much higher than any available forecasts, he notes. “In the context of a shortage of supply and high car prices, this potential cannot be realized. But we see that new projects appear inside Russia and parallel imports are growing, new models appear on the market at more attractive prices. Gradually, the problem with the proposal will be solved,” the expert is sure.
Tedo’s baseline forecast (670,000 cars) looks overly conservative, Bespalov said. But so far, there is still uncertainty about exchange rates, geopolitics and the economy, he states. On the horizon of 2027, the expert’s forecast roughly coincides with the vision of Tedo analysts.