Industry insiders in the automobile sector anticipate a noticeable dip in Russia’s new passenger car market during the fourth quarter of 2023, with anticipated declines ranging from 5% to 10% versus the previous quarter. This outlook was reported by ROAD, the Russian Association of Automobile Dealers, and echoed by analysts familiar with the local market dynamics reported through RIA News. The projection reflects broader supply and demand challenges facing Russian dealers as the year concludes.
Forecasts presented to stakeholders highlight three primary headwinds. First, the increase in the recycling fee adds pressure on pricing and consumer cost perception at the point of purchase. Second, a higher Central Bank policy rate translates into tighter financing conditions for buyers, reducing affordability. Third, a softer ruble exchange rate affects import costs and, by extension, the retail price of many new vehicles. In this context, a cautious scenario suggests the market could stay at the third-quarter level, while a more conservative view points to a decline in the vicinity of 5% to 6 percent, with a potential drop toward 10 percent depending on ongoing macroeconomic shifts and consumer sentiment.
Prior commentary from representatives associated with the Ministry of Industry and Trade indicated a potential bottoming and gradual recovery for the Russian auto sector. The Ministry suggested that 2024 might see total sales approaching 1.3 million units, signaling the start of a longer recovery trajectory. Long-range projections from the same body proposed that annual sales could align with the average observed between 2015 and 2021 by 2026, followed by a steady growth rate of about 1% per year from 2027 onward. Under this scenario, the market could reach roughly 1.8 million vehicles per year by 2030 and approach 1.9 million per year by 2035, representing a measured, stepwise improvement rather than a rapid rebound. These projections reflect an intent to restore historical demand levels while accounting for structural changes in the market and investment in local production capacity and channels.
Earlier statements from ROAD pointed to a total pace of approximately 950,000 new passenger car sales in Russia by the close of 2023, highlighting a softer year relative to peak years and underscoring the need for strategic adjustments within dealer networks, financing programs, and consumer incentives. Industry observers in North America and other regions monitor these developments for signals about local auto finance trends, cross-border supply considerations, and how macroeconomic shifts can shape car-buying behavior globally. The ongoing dialogue among policymakers, manufacturers, and dealers continues to center on balancing affordability with the costs of compliance, financing, and vehicle availability as the market navigates through the current cycle.”