By winter they will manage: the car market was predicted to grow and difficult times |  Articles

The Association of European Businesses expects growth in car sales in Russia this year. However, the situation is still difficult. When the shortage of cars will end and whether prices will stop rising, Izvestia found out.

The deferred demand due to the 2020 lockdown determined the development of the market in 2021 as well. Exceeding expectations of sales dynamics allowed the Association of European Businesses to update sales forecasts for the year: from 1 million 632 thousand cars to 1 million 756 thousand cars.

Leaders and outsiders

In the fall of 2021, the shortage of components began to seriously affect the market and even repeatedly led to downtime of car factories. The final sales figure was therefore more modest: 1,666,780 vehicles, which is 4.3% more than in 2020. In the black, almost all key brands, market leaders AvtoVAZ, Kia and Hyundai showed a slight increase in the range of 2-3%.

Leading the way in terms of dynamics are Chinese brands that launched new models amid shortages and are less dependent on semiconductor supplies. As a result, Haval finished the year in 12th place in the overall standings, showing a growth of 125% (39,126 units). Chery follows in 13th place with a small margin: 37,118 cars (224%). Chery’s premium brand Cheryexeed also achieved success, with 3,756 vehicles (+1,562%). A significant drop was shown by VW (-14%), UAZ (-11%) and Nissan (-9%).

Photo: TASS/Vitaly Nevar

In premium, there was almost universal growth, with Genesis showing the best dynamics – by 248%. This happened due to the expansion of the model range, primarily due to crossovers, and a new dealer network. Although in quantitative terms, the success of the young Korean brand is still modest: 4.5 thousand cars. In the red, Lexus (-7%), although it is still in the top 3 premium brands, and Jaguar (-46%), which suffered more than others from problems with the supply of updated cars.

The shortage of semiconductors was felt by all automakers, but to varying degrees.

“Every day something new, some deliveries, on the contrary, go ahead of schedule, somewhere something is delayed,” marketing director Dmitry Dankovsky told Izvestia.

For instance, Lada Vesta, which became the most popular car in the Russian market in 2021 (113,608 units), suffered less from interruptions in the supply of components than the second-placed Granta. Thanks to the success of logistics, Toyota managed to sell more RAV4s and Camrys than in 2020, Renault was able to gain profit with the Duster and Arkana, and Skoda with the Karoq crossover. The more high-tech liftback Skoda Octavia, on the contrary, left the top 25.

Which numbers to believe

Even a slight growth of the Russian market against the background of falling sales in the EU markets looks positive. However, Sergey Burgazliev, an independent consultant on the Automotive and Transportation industry, believes that in 2021, it was possible to become profitable primarily due to a low base: due to the lockdown, car sales were practically stopped for several months. The expert recommends focusing on the statistics of registrations of new cars.

Фото: Depositphotos / photographee.eu

Typically, the figures provided by automakers exceed the number of registered cars. From January to November 2021, 1,350,548 new cars were registered in Russia, according to the Avtostat-info agency. According to AEB statistics, 1,439,045 vehicles were sold during the same period. So while the difference is quite impressive 88.5 thousand pieces.

Therefore, forecasts (AEB promises growth of 3.3%, and Rolf even up to 5%) may turn out to be too optimistic.

When will the shortage end?

“In 2022, the market will fall, and, most likely, the drop in sales will be noticeable. If there is no state support program or AvtoVAZ itself will not start making semiconductors. The problem with microchips will not be solved until the middle, or maybe until the end of the summer. And if it succeeds, then these components will go to first-tier suppliers at the end of summer – early autumn, they will go to the factory somewhere in October, and the car will be made at best in mid-November. And by the beginning of winter, she will only arrive at the market.– says Burgazliev.

According to him, the situation should improve in 2023-2024. But still, annual sales are unlikely to exceed 1 million 650 thousand units.

Experts and market players also believe that the situation with a shortage of components and, as a result, a shortage of cars will not be resolved overnight.

«In my opinion and according to the information that we have now, the situation in the European market will remain the same for the next six months, which, in turn, will affect the whole year. It remains to be hoped that by 2023 the situation will become easier. It must be remembered that the problem is not only in this, but in general in the increase in prices – for aluminum, which, in turn, affects the prices for production in China, for transport, and so on.“, – said the chairman of the AEB Automobile Manufacturers Committee, Dr. Thomas Shterzel, to Izvestia.

Фото: Depositphotos/mproduction

“Inflation in the world is very high, significantly higher than many predicted. We do our best to keep prices down,” said Aleksey Kalitsev, Managing Director of Hyundai Motor CIS. At the same time, he acknowledged that the automaker cannot dictate recommended prices to dealers.

What will happen to prices

In addition to inflation, rising prices are driven by a shortage of new cars from dealers. According to Avtostat, the weighted average price of a new passenger car in Russia increased by 20% in 2021 and exceeded 2 million rubles. Experts note that the last time such a sharp jump in the weighted average price was in 2015.

“We expect the gradual increase in car prices in 2022 to continue. Customers are now considering buying a car as a way to invest money. Often, a used car can now be sold for more than it was bought new a year or several years ago,” Vladimir Miroshnikov told Izvestia.

Sergey Pletnev, Managing Director of the BMW, Mini and BMW Motorrad brands of AvtoDOM Group, also speaks of a consistently high demand for cars.

“Car availability in the Russian market is currently at its lowest level since 2020. Moreover, the improvement of the situation is possible not earlier than the second quarter of 2022. Thus, the demand for cars in the Russian Federation will remain at the level of 2021, while the availability will remain low,” Pletnev said.

Will go online

Non-transparent pricing at dealers may spur interest in the online format of buying a car. For example, Hyundai allows you to purchase a car in this way at a suggested retail price.

The dealer will release the car, but will not be able to arbitrarily equip it with additional equipment. Another opportunity to save money is car manufacturers’ loan programs, which can also be applied for on the Internet. And the telematics installed on the car will save on cybercasco, the price of which will depend on the mileage. According to Aleksey Kalitsev, online sales will continue to take their share from traditional offline sales. The popularity of alternative ways to use a car, such as a subscription, will also continue to grow. By subscription, Hyundai plans to offer its new Ioniq 5 electric car.

Фото: Global Look Press/Frederic Kern via www.imago-imag

As for the segment of electric vehicles as a whole, its further development is hampered by the abolition of the zero duty on the import of such vehicles into Russia. Plans for the localization of electric vehicles in Russia are still devoid of specifics, and there are few applicants. Kia and Hyundai, for example, have denied rumors that they intend to localize their new electric models.

What will they drive in 2022

“The volume of the market at the moment is determined not by demand, but by the availability of cars: it is limited both in the mass and in the premium segment,” Vladimir Miroshnikov, Rolf development director, told Izvestia. Meanwhile, statistics show an increase in the popularity of the crossover and SUV segment.

The most popular foreign car in 2021 was the Kia Rio, but more than half of the success of this model was provided not by a sedan, but by the X-Line pseudo-crossover. The off-road segment is becoming more and more popular, in 2021 its share reached 47.29%, according to the Association of European Businesses, and more than 50%, according to the Avtostat agency. Moreover, the share of all-wheel drive versions with automatic transmission is also growing.

Photo: TASS/Valery Sharifulin

The best-selling model remains the Hyundai Creta, while it is out of competition. Hyundai, having decided to become the leader in the SUV segment, even redistributed production at its plant in St. Petersburg in favor of Creta. Solaris, which remains the entry model, accounts for only 35% of production. Other brands also focus on SUVs and crossovers. Infiniti, for example, stopped supplying coupes and sedans to the Russian market. “SUV” Haval Jolion and Chery Tiggo 7 Pro during the year repeatedly hit the top 25 most popular models and have a chance to improve their positions this year.

However, the diversity of the SUV segment is also declining: Haval, Geely and JAC have abandoned outdated models. Almost sold stocks of cars Brilliance, Lifan, Foton Zotye. In addition, 2021 will be the last year in Russia for Honda.

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