Sales of new passenger cars and LCV (light commercial) vehicles in Russia in April 2022 decreased by 78.5% compared to the same period last year, the Association of European Businesses reported. In a month, only 32,706 new cars were sold in Russia, although a year earlier the sales volume was 151,964.
This is the worst monthly sales result in the association’s history. Prior to this, the most serious market contraction occurred two years ago, in April 2020. At that time, non-working hours were announced throughout the country due to the spread of the coronavirus and car dealerships were closed. Sales collapsed 72% to 38,922 vehicles.
Sales of “AvtoVAZ” in April of this year decreased in accordance with the market average – by 78% to 8506 vehicles. The traditional market leaders Lada Granta and Lada Vesta lost more than three quarters of their sales, but still remained in the first positions in April, follows from the statistics.
AvtoVAZ was forced to go on an unscheduled corporate leave from April 4 to April 24 due to a shortage of auto components and the uncertainty of the format of interaction with the main shareholder, the French Renault. Vedomosti sources said that Renault could sell its 68% stake in the Volga Automobile Plant to FSUE NAMI, which is subordinate to the Ministry of Industry and Trade. Later, the head of the department, Denis Manturov, confirmed the consideration of such a scenario. He added that the deal is likely to be cashless, but will include the possibility of the French buying back their stake after the geopolitical situation becomes calmer.
Among the other leaders in sales in April, Toyota distinguished itself by selling 786 cars – almost 11 times less than in April last year. A similar (nine times) drop is observed in Volkswagen, which was able to sell only 1,104 cars last month. Of the 51 brands featured in the April report, only Cheryexeed (a sub-brand of China’s Chery) and Isuzu were able to improve their last year’s figures, and even those from a very low base of 200 and 67 cars, respectively.
In January-April 2022, sales of new passenger cars and LCVs decreased by 43% to 293,846 units. Thus, the rate of negative dynamics for the first four months has already approached the baseline scenario for the annual forecast of Avtostat, which the analytical agency presented in early April. In the base case, this forecast assumed a halving of the passenger car market (or by 750,000 cars) compared to 2021. The negative scenario assumed a 70% reduction in sales to 470,000 units. The implementation of one scenario or another depends on how quickly auto plants in Russia can resume assembly, analysts emphasized.
According to Vedomosti’s calculations, in the second half of April, less than a quarter of the auto industry’s capacities in Russia, operating in 2021, continued to produce passenger cars and light commercial vehicles (LCV). The assembly was not stopped by the GAZ group, UAZ, Mazda Sollers JV in the Far East, Avtotor Kaliningrad, Isuzu, as well as the Chinese Haval in the Tula region. At the same time, UAZ went on a corporate vacation for the May holidays and will resume assembly only on May 16, the company reported.
Unlike the decline in sales in April 2020, the market will not be able to quickly recover from this peak, says independent automotive consultant Sergey Burgazliev. Then already in May, the rate of negative dynamics decreased – the market decline was 52%, in June – 15%. This year, in the next month or two, the situation will not change, Burgazliev is sure. Car factories are still mostly idle due to problems with the logistics of components, which has risen in price by up to three times since February, the expert notes. Even those brands that still have cars in stock cannot always sell them because of the sharply reduced interest of buyers, adds Burgazliev.