Page 19 - RusRPTJun24

the Russian automotive business, depressing the market for a year until the autumn of 2023 when sales began to recover.
Over the last two years foreign manufacturers – largely Chinese, but with a growing share of other countries like Iran – have gleefully stepped into the hole created in the market by the departure of the OEMs.
As followed by bne IntelliNews, according to other estimates passenger car sales in Russia doubled year on year to 356,000 vehicles in 1Q24.
“The first quarter of 2024 showed strong results. The significant increase in supply corresponded to extremely high demand. Demand was stimulated by adaptation measures of state support,” AEB’s head Alexey Kalitsev commented.
As followed by bne IntelliNews, Kalitsev noted that changes in regulation and taxation of the car sector coming into force in April 2024 led to front-loaded demand and sales growth more than doubling compared to last year.
Car sales in Russia were expected to jump in the beginning of 2024 due a number of regulatory measures that are likely to raise sales prices later in the year. As of April 1, the "grey" schemes of import through the EEU countries will be outlawed, which previously allowed to reduce the cost of imported cars.
“The likelihood of a significant increase in the price of a car due to possible additional charges was an incentive for consumers who were planning to purchase a car to resolve this issue before the new rules came into force,” Kalitsev noted.
“Based on the emerging trends on the market and taking into account the fact that there will be no significant negative changes, the AEB confirms the previously announced forecast and believes that in 2024 the market will reach and possibly exceed 1.3mn new cars [sold],” AEB press release said.
To remind, Chinese cars have dominated the Russian market since the beginning of the full-scale military invasion of Ukraine. They are also expected to take over vacant assembly capacities left behind after the exodus of Western, Japanese and Korean carmakers.
Chinese automotive companies are growing quickly and China’s BYN has already become the largest market and exporter of electric vehicles (EV) last year. Brands like Chery, Geely, and Great Wall were already established in the Russian market at the time of the start of the war in Ukraine, and they have all expanded production rapidly.
At the same time, Russia turned to Iran to help rescue its car industry, which has also developed a large automotive sector, and did so entirely under a sanctions regime that was first imposed in 1979. Iran has a large automotive sector that caters to its domestic demand, based on French technology. Iran has also dramatically increased exports to Russia since the start of 2023.
19 RUSSIA Country Report June 2024 www.intellinews.com