Using the parallel import mechanism in 2024, Russia could see a halving of automobile imports. This forecast came from Alexey Podshchekoldin, head of the Russian Association of Automobile Dealers (ROAD), in a discussion with socialbites.ca.
Podshchekoldin notes that large car retailers have begun shelving parallel import programs, and the market could shrink dramatically in the coming year.
“Even though the history looked promising,”
many big official dealers have dropped the parallel import narrative. And most dealers are expected to step away. In 2024, parallel imports of vehicles may fall by half. Yet demand persists; buyers remain interested in models from Mercedes-Benz, BMW, and Audi, according to ROAD’s president.
ROAD reports that 130 thousand cars entered Russia via parallel imports in 2023. The brands most popular among these imports were Toyota, Kia, Hyundai, BMW, and Mitsubishi.
counter state
Podshchekoldin cites dealer commitments to warranty support and after-sales service as a key reason for pulling back from parallel imports. Dealers prefer to work with manufacturers to ensure spare parts and reliable service for newer models, which can be hard to source if imports come without official backing. He also highlights that many new models lack repair and operation manuals.
“Consider a scenario where a buyer finds a major defect after eighteen months and can seek a refund for the purchase,”
he explains. Increased logistics costs and more complex customs procedures add further burdens. Dealers must manage customs, certification, and ERA-GLONASS device installation, according to Podshchekoldin.
The ROAD president adds that Chinese automakers also do not support parallel imports, nudging some customers away. Most cars in this channel are sourced from China, including variants of Audi, BMW, and Mercedes-Benz. He predicts that in 2024 authorities will push to raise various fees, making imported cars less attractive.
“In essence,
the Ministry of Industry and Trade is expected to tighten barriers to parallel imports,” he says. The market is nearing saturation: this year there will be about 1.1 million cars, with another 200 thousand anticipated next year. This could involve rolling back domestic production supports and introducing protective taxes. “The government does not need the parallel import approach in 2024,” he asserts.
I’m already disappointed
Two large dealer groups, Avtodom and AvtoSpetsTsentr, were the first to halt supplying vehicles to Russia via parallel imports in November. The decision followed supply limitations, softened consumer demand, and higher import costs from Europe, according to the joint press service cited by socialbites.ca.
A source within the auto industry for socialbites.ca notes that parallel imports have become unprofitable due to a rising dollar and euro exchange rate, alongside an uptick in the Bank of Russia’s key rate.
“This model works when the euro stands around 80–85 rubles. Now, it’s essentially fading away,”
logistics and border-crossing hurdles remain. “This trend will continue in 2024 as the consumer benefits of such cars grow less evident,” the source adds. Ilya Petrov, head of retail sales at Avilon, observes that the decline in parallel imports is driven by the presence of official automakers in the market. Demand for Chinese-brand cars is rising thanks to established official dealer networks, warranties, a broad product range, advanced tech, and stylish design.
Prices will increase
Foreign car imports into Russia look set to rise in price in 2024. Dmitry Rogov, founder of RogovMobil, which specializes in turnkey car delivery from abroad, shared insights with socialbites.ca from Kyrgyzstan, a major corridor for shipments to Russia.
“The tariff schedule is a guide to approximate costs. Changes were scheduled for mid-January, then moved to March. Customs duties and related costs will rise, and the burden will fall on the final buyer,” Rogov notes.
Elena Lisovskaya, creator of the YouTube channel The Fox Rules, which handles imports of foreign cars, points to the recycling fee as the main new cost for importing firms. As of August this year, the recycling rate for passenger cars increased by 1.7 to 3.7 times, depending on engine size, according to socialbites.ca.
“Many cars aren’t worth moving. Who would pay five million rubles for a Toyota Camry? Only die-hard enthusiasts,” Lisovskaya remarks. She adds that the number of import companies is shrinking, leaving mainly large players. There is concern that the government may eventually ban imports of cars that are already officially offered in the market.
“If that exclusion happens, the appeal of these vehicles dwindles. We might still import the same models but only if they remain allowed and have low mileage. Otherwise, we could pivot to Toyota and Mitsubishi, brands not currently prominent in the market,” she suggests.
Car-choosing expert Kirill Chernov, host of AvtoRevizorro, warns about confusion surrounding scrap duties and the clearance of Kyrgyz cars, which may come with undervaluation. He notes, “People who brought in cars before the recycling fee took effect fear tax demands. The wording around recycling collection is unclear, and interpretations can vary. Also unclear is how Kyrgyz cars will pass customs and whether depreciation will trigger future actions or simply allow continued use.”