Demand for commercial vehicles continues to decline

In the used commercial vehicle market, the situation is markedly different. Thus, in March, the LCV segment grew by 8%, while the truck segment decreased by 7%. The deepest decline in both segments began in May, when registrations of LCV and HCV decreased by 16% and 20%, respectively, compared to April. Relative to 2021, the largest “failure” of the used car market was observed in April – by 27% in the LCV segment and by 37% in the truck segment.

Prices for transport, including commercial, will continue to grow, experts say. This will inevitably lead to a drop in demand for commercial vehicles from the business side.

The probability of falling demand for commercial vehicles was also noted by Russian President Vladimir Putin at a meeting on the development of the automotive industry as part of the St. Petersburg International Economic Forum.

“If the main problem in the passenger car market is supply, then the commercial vehicle market may face a shortage of demand. Here, the main buyer is business, transport companies. Many of them are now holding back investments, analyzing the current market and logistics situation, including in in connection with the ban on the entry of trucks of Russian companies into Europe,” Putin said.

Commercial vehicle prices have been gradually rising over the past two years. In 2021, the average cost of new trucks increased by 30% compared to the year before last – from 5 million 847 thousand rubles to 7 million 493 thousand rubles, says Alexei Tuzov, an independent expert in the transport industry. In his opinion, this year the rise in prices will be more significant.

In 2022, it was planned to import 25 thousand units of new equipment to the car market, as a result, only a fifth will be delivered, and the commercial vehicle fleet of the Russian Federation needs urgent updating, the expert notes. The increase in prices for components for the repair of existing LCVs amounted to about 70% this year, which negatively affects the cost of transportation services, as well as demand.

According to Dmitry Baranov, a leading expert at Finam Management, the dynamics of prices for commercial vehicles can be cyclical. Prices will reach a certain level, then their growth will stop for a while, but then they will go up again. However, it is possible that in order to maintain demand, automakers may reduce prices for individual models, but this will only be for a short period of time, he said.

Business stands for the support of commercial transport by the state. “Consumers need to be helped: to support demand with targeted subsidies for the purchase, which will revive the market and give impetus to the revival of the entire economy,” the press service of the Gorky Automobile Plant (GAZ) told RG. For consumers of commercial vehicles, a paradoxical situation has now developed, when there are not even regular programs on the market that worked and worked perfectly in more favorable periods and have long proven their effectiveness. There is no affordable leasing, no subsidies for the purchase of gas vehicles. Consumers of light commercial vehicles are 80% of small and medium-sized businesses that, in any crisis situation, postpone the purchase of new cars or go to the secondary market. Today they do not have available funds and tools for this investment, so the market is in a stupor, in April-May it fell by 60%, the press service emphasized.

Dmitry Baranov from UK “Finam Management” also thinks. Assistance can be provided to road carriers both for the purchase of commercial vehicles, and for its operation, as well as for its termination, he says. The first step is to change regulations to make it easier for companies to acquire, use and dispose of commercial vehicles. According to him, it is also possible to provide various benefits, subsidies, state guarantees, in addition, the state can increase the number of orders using commercial vehicles. The expert also emphasizes that it is not enough to help only carriers: automakers and manufacturers of fuels and lubricants also need support.

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