Page 77 - Russia OUTLOOK 2024

After almost completely collapsing in 2022 and only slowly recovering in the first half of 2023, car sales in October and November have risen to put Russian annual car sales on track to recover most of their sanction-related losses to around 1.3mn sales a year in 2024. However, imported Chinese cars now dominate new sales.
Russia’s automotive sector was probably the hardest hit of any sector after sanctions were imposed early in 2022. As the sector relies heavily on imports of parts that make up some two thirds of cars produced in Russia, factories came to a virtual standstill overnight. From manufacturing roughly 1.5mn cars a year, at its low point the entire sector produced a mere 3,500 cars in July 2022.
Since then, production has recovered a lot of the ground lost and was producing about 60% of its previous pre-war levels as of the end of 2023, but the problem of sourcing many parts remains.
Russian brands are once again market leaders in terms of sales, followed by Chinese, and to a lesser extent Iranian car makers, which have stepped into the hole left by the departing European Original Equipment Manufacturers (OEMs) and rapidly taken over their market share.
The state has played a particularly active role in buying the factories of exiting car companies, as many factories play a central role in the local economies of the towns and regions where their main facilities are located.
Sales of new cars and light commercial vehicles (LCVs) in Russia may rise by 45.6% in 2023 y/y to 1mn units, chairman of the AEB (Association of European Businesses) Automobile Manufacturers Committee Alexey Kalitsev said.
"We revise our outlook for 2023. We believe that the total market of car sales in Russia is going to reach around 1mn [units], which is a substantial increase compared with 2022," he said.
"The second [reason] is the emergence of a large number of new players that have already voiced their plans to enter the Russian market or that are currently preparing the entry into the Russian market in the second half of the year ... and, of course, the alternative import. It continues now, though we think its share will gradually decline," he said.
Earlier, the AEB projected a 12% rise in sales of cars in Russia in 2023 to 770,000 units.
In 2022, sales of new passenger cars and LCVs in Russia fell by almost 59% compared to 2021 to 687,000 vehicles.
77 Russia OUTLOOK 2024 www.intellinews.com