Demand for new cars is falling in Russia. The price increase is to blame

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New car sales on the Russian market have declined. This is evidenced by the new quarterly report of the Association of European Businesses (AEB).

According to the calculations of AEB analysts, in the first quarter of 2021, sales of new passenger cars and light commercial vehicles in Russia decreased by 2.8% compared to the same period in 2020. And in March, sales fell by 5.7% altogether.

In the period from January to March of this year, a total of 387,322 new cars were sold in the country, which is 11,196 units less than a year earlier. Of these, commercial vehicles accounted for 5.5% of sales, or 21,263 units, and off-road vehicles – 47.3% of sales, or 183,266 units. Pickup trucks were sold in the first three months of this year, only 1,784 units, and even fewer new electric vehicles – 204 units.

According to Thomas Stärzel, chairman of the AEB Automobile Manufacturers Committee, the drop in sales was quite expected. The decrease in purchasing activity was influenced not only by the ongoing coronavirus pandemic, but also by the rise in prices for new cars, as well as the shortage of some models and the uncertainty with the increase in the size of the recycling fee. But already in the second quarter, sales of new cars in Russia may return to growth, at least compared to last year, which is called one of the worst periods in the history of the automotive industry due to the negative impact on business of COVID-19.

If we consider specific automakers, then the most popular brand among Russian buyers remains Lada. The domestic brand accounted for 83,908 sales in the first quarter, which is 5% more than a year ago, when sales were 79,600 units. AvtoVAZ with the Lada brand now occupies 21.7% of the market. In second place in popularity is the Korean KIA with sales of 51,624 units and a 13.3 percent share. Hyundai cars sold over 40,000 units in the reporting period, allowing the manufacturer to occupy 10.5% of the market. Renault brand sold 30,364 new vehicles in January-March 2021, down 5% year-on-year. Sales of Toyota cars also fell – by 15% from 27,231 to 23,251 units. This, however, did not prevent the Japanese brand from entering the top five leaders of the Russian car market.

Interestingly, Chinese brands showed the largest sales growth in the last quarter. Thus, deliveries of Chery cars grew by a record 274%, Haval – by 62%, Geely – by 42%, and FAW – by 53%.

The best-selling car of the last quarter was Lada Granta. The domestic sedan sold 30 196 units in three months. It is followed by the KIA Rio with sales of 24,638 units. The third place is taken by Lada Vesta, which was bought 23 871 times. Hyundai Creta accounted for 19,323 sales. And another Korean – Solaris from Hyundai with sales of 14 940 units – closes the first five of the most popular new models in Russia.

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