In 2022 a significant shift occurred in Russia’s automotive landscape as 45 brands exited the market. Today, only 14 manufacturers remain, with three domestic brands and eleven Chinese brands continuing to operate in the country.
Dealers are largely stocking vehicles in the higher price brackets. The middle segment, once home to mainstream models from brands like Kia, Hyundai, Toyota, Renault, and Volkswagen, has diminished, leaving mainly expensive Chinese models on many showrooms. Given current sales volumes, existing stock could last only about a month. Parallel imports have not yet met consumer demand, and domestic production from the Chinese brands is gradually increasing.
Experts warn that the shortage of new vehicles could reach a million units in the coming year.
Today, roughly 3,000 auto centers operate across the country, and by 2023 many may face empty warehouses as supply tightens further.
Analysts estimate the shortfall could climb to 1.1 million cars, with a heavy tilt toward budget brands. Importing such vehicles is financially unattractive for many dealers due to challenging supply routes and high excise duties. As a result, even inexpensive cars may rise in price by at least 10 percent, and consumers are not inclined to pay more than necessary.
Parallel imports are not delivering as hoped. Units continue to pass through ports, but the system isnulfills the expected volume.
With scarcity persisting, price increases from Chinese manufacturers have become evident, pushing the cost of their vehicles to roughly 2–3 million rubles, making them a premium option in the market.
What to anticipate
The shortage is expected to continue in the months ahead. Based on production from AVTOVAZ, Moskvich, and imports from China supplemented by parallel imports, a maximum of about 750,000 new cars could be added to the market next year.
Looking forward to 2024, the market may hinge on whether VAZ, GAZ, and UAZ can expand capacity and reintroduce meaningful competition against Chinese brands. Such expansion would be a key driver in bringing prices down and restoring some balance to supply and demand.
As spring approaches, clarity will emerge about which brands will fill the market and to what extent in the Russian automotive sector.
Acknowledgments: coverage reflects reporting from major outlets and industry observers; images credit a noted photo agency and photographer.
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