The Russian car market in March showed a repeat pattern seen in 2009 and again in 2015, with a steep fall in new passenger car sales—down by about 63 percent from the first spring of 2021.
Overall, sales reached 55.1 thousand vehicles, leaving a gap of 93.5 thousand compared with the same period. This assessment comes from the Automobile Manufacturers Committee of the Association of European Businesses in Russia. By contrast, February alone saw dealers moving around 114 thousand cars across the country.
March’s performance marked the weakest start to spring since April 2020, when the market faced heavy disruptions after the pandemic began. That month, purchases dropped to roughly 39 thousand units, a period labeled by the AEB as “black April.”
In the broader context, March was the weakest first month in the last 15 years in terms of sales. That assessment comes from the analytical firm Avtostat.
AutoVAZ maintained its position as the market leader, selling 12.3 thousand vehicles, a drop of 64 percent versus March of the previous year. In second place, Kia sold about 6.3 thousand cars, nearly half the volume of the leader, reflecting a 68 percent decrease. Hyundai, Renault, and Toyota followed, with GAZ, Skoda, Nissan, Volkswagen, and UAZ rounding out the top ten.
Compared with March last year, sales declined for every brand represented in the Russian market. The only exceptions were three brands: Exeed from China (up 63%), Isuzu from Japan (up 467%), and Chevrolet from the United States (up 91%). Conversely, brands such as Lexus, Cadillac, and Fiat suffered the most pronounced percentage declines.
For the second consecutive month, the AEB did not publish a forward-looking forecast in its market reports.
Stock levels projected to stretch into summer
Experts from dealer centers, interviewed by socialbites.ca, anticipate further deterioration in market conditions. Sellers are forecasting a continued decline in sales in the coming months, driven primarily by a persistent shortage of available vehicles. It is noteworthy that this shortage affects both dealer shipments and domestic production, as noted by Renat Tyukteev, the director of Avilon Mercedes-Benz.
In the medium term, the vehicle shortage is expected to persist for about four to five months. At present, there is a cautious certainty that prices are not expected to fall, according to Renat Tyukteev. Customer traffic in auto showrooms has not dropped off entirely; buyers showed strong interest in early March, but demand has since stabilized to a more moderate level at Avilon, according to dealers.
Dealers estimate that stock on hand is sufficient for roughly two to five months of trading, depending on business volume. The top end of the market currently experiences the most pronounced shortage. Andrey Olkhovsky, CEO of Avtodom Group, notes that the drop in demand reflects expectations that new-car prices may fall, but he views these hopes as optimistic speculation rather than likely outcomes.
Olkhovsky predicts April demand could fall to around 70 percent of April of the previous year. Seen from the supply side, prices have already surged by 50 to 100 percent since the start of the year, with margins continuing to rise as every participant in the production chain seeks a larger share of the overall value.
For most brands, new cars may exhaust stock by early summer, with a more favorable delivery scenario expected, at best, in the fall of 2022. In this scenario, the supply gap would extend into 2023 for many models. These projections do not apply uniformly to Chinese manufacturers, who are expected to boost sales volumes. Some brands, such as Chery and Exeed, have already launched programs to support customers, according to a source familiar with the market.
Opinions on when the market will recover
Auto expert Igor Morzharetto suggests the shortage could ease by summer, but advises delaying new-car purchases until supply chains stabilize. He believes Korean and Chinese brands will continue to operate in Russia, though they will need time to establish new logistics routes.
In Morzharetto’s view, new cars are currently priced highly, and the secondary market remains expensive as well. Therefore, potential buyers may be better off waiting. If someone already owns a vehicle, it is prudent to maintain it and protect its value, as the duration of the wait remains uncertain, Morzharetto noted in a discussion with socialbites.ca.
For further guidance on extending vehicle life, readers can consult previously published material from socialbites.ca.