Car prices in Russia did not rise for the first time at the beginning of the year after a record drop in demand

Russian car dealers have not recorded an increase in recommended retail prices for passenger cars since the beginning of 2023, contrary to the practice of previous years, when they increased on January 1, Kommersant writes, citing dealers.

Traditionally, car suppliers have raised prices since the beginning of the year to match the inflation rate of 3-4%, but as of January 9, prices in the Russian market have not changed, says the head of the Fresh dealership Auto Denis Reshetnikov. Renat Tyukteev, director of retail sales of Avilon, also confirmed the static prices.

According to Autostat, the Russian market for new passenger cars collapsed in 2022 by 58.7%, to 626,281 units. In December, which is considered a month of high sales, the demand for cars was 58% lower than a year earlier.

Because of the sanctions, 16 out of 19 car factories in Russia have suspended work. As a result, only 14 brands remained on the market, only three of which are Russian, and the rest are Chinese. According to car dealers, the cost of cars increased by 20-25% over the year. The average price of a new car in 2022 was 3.4 million rubles, which is 11% more than in 2021.

Against this background, there was a shortage of cars in the country and the prices for used cars costing from 1 to 1.5 million rubles increased.

Despite a more than halving demand, car prices will continue to rise in 2023, car dealers say. “The final price will depend on a number of factors – the exchange rate, logistics costs, the requirements of the Russian government for customs clearance of imported cars. Cars that are assembled in Russia will rise in price within the limits of inflation. In my opinion, an increase of 5-10% at least is possible,” says Reshetnikov.

Cars of the new model year, including those of AvtoVAZ, may rise in price by 3-4%. Chinese manufacturers are now changing the size of discounts to control the price of cars. So, for example, Chery at the end of last year they reduced discounts by 7%, and Changan Uni-K – by 3.6%. According to Sergey Udalov from Avtostat, the discount game helps Chinese manufacturers quickly respond to changes in supply and demand.

As a result, even with low traffic in dealerships in early January, Chinese brands were selling more actively, Tyukeev notes. “Here, the expansion into the market share of European and Korean brands is slowly but surely materializing,” he says.

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