Used car market to stagnate in 2022

by time news

Sales of used passenger cars in Russia in 2022 will grow by no more than 3% to approximately 5.97 million units. Sergey Udalov, executive director of the Avtostat analytical agency, told Vedomosti about this following the results of the ForAuto 2022 forum. In 2021, this market segment increased by 8% to 5.95 million units, follows from the presentation of Avtostat for the forum.

The general situation with the income of the population does not contribute to the growth of the market, plus there is a decrease in sales of new cars: therefore, people do not sell old ones and the secondary market is not updated, explains Udalov. The shortage in the new car market and rising prices will continue to slow down the used car market, the analyst is sure.

“Thus, there will be no significant growth in the segment. Cars have become quite expensive, and people will take a wait-and-see attitude for the time being. The segment will remain within 6 million units. The dynamics of price growth will decrease – that is, they will continue to grow, but not at the same speed as a year earlier, ”summed up Udalov.

Prices in the used car market in 2021 grew even faster than for new cars. The average cost of a used car at the end of the year amounted to 787,752 rubles, which is 28% more than in 2020, follows from the data of Avtostat. The average cost of a new car last year increased by 18% to 2 million rubles. But the agency calculates from the manufacturer’s recommended retail prices (RRP). The dealer margin for additional equipment added 10–30% to the RRP in 2021, depending on the model and its scarcity.

The shortage of new cars appeared back in 2020. Then, after the restrictions of the spring coronavirus lockdown were lifted, buyers quickly bought all stocks from dealers. Automakers were unable to quickly increase the pace, many plants did not cancel their annual summer vacations against the backdrop of growing problems with the supply of spare parts. The weakening of the ruble and the expected rise in prices only exacerbated the situation. The key factor in the dynamics of the car market in 2021 was the shortage of electronic components. It arose at the end of 2020 due to a lack of capacity for the production of microcircuits. As a result, booming sales began to fall since the summer of 2021, as car factories without chips were not able to meet demand. In July 2021, sales of new cars decreased by 6.5% year-on-year to 132,640 cars, the Association of European Businesses (AEB) reported. In the following months, the dynamics of the decline began to be measured already in double digits. But due to growth in the first half of the year, the market still managed to enter the positive zone in 2021 (+4.3%). Sales for the year were 1.667 million new passenger cars and light commercial vehicles (LCVs), the AEB calculated.

The AEB Automobile Manufacturers Committee expects sales of new passenger cars and LCVs to grow slightly in 2022, at 3.3% to 1.722 million, says chairman Thomas Stärzel. He assumes that the main negative factors – problems with microchips, production cuts, disruption of supply chains – will not be eliminated through most of 2022.

The decline in the purchasing power of the population will put pressure on demand in the secondary market, says Sergei Burgazliev, an independent automotive industry consultant. He expects sales growth in the segment at 6%. Prices will rise by another 10-12%, the expert believes, noting that the real picture of what is happening will depend on whether the shortage of microchips ends in the second half of the year.

The representative of the Association “Russian Automobile Dealers” also spoke about the decrease in purchasing activity, but on new cars. This factor even began to lead to the fact that the situation with the deficit gradually began to improve, he told Vedomosti.

Rosstat estimates that real disposable incomes of Russians grew by 3.1% in 2021, but the purchasing power of these incomes fell last year for half of basic food products. This follows from the data presented by the statistical office in the final report on the socio-economic situation in Russia for 2021. Food inflation at the end of the year was 10.6%, and these rates are much lower than how much cars have risen in price.

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