What are the prices
The Moskvich Automobile Plant rewrote the price lists for all configurations of Moskvich 3 crossovers and Moskvich 6 liftbacks. Prices for the younger versions of the crossover “Standard” and “Standard Plus” decreased by 630 thousand rubles, while the price of the older “Comfort” version fell by 720 thousand rubles.
Like this, “Moskvich 3” at a price of 1.59 million rubles. It has become the most affordable crossover in the Russian marketIt surpassed the Livan X3 Pro, which had a recommended retail price of 1.9 million rubles at the beginning of March. The price of the latter also decreased, but still remained more expensive – 1.7 million rubles.
Cheaper than the Moskvich 3 are only VAZ’s subcompact Lada Niva Legend and Travel, but these are permanent all-wheel drive SUVs and occupy a completely different market niche, with other consumer characteristics.
The price of the Moskvich 6 liftback dropped by almost 500 thousand rubles in all versions. Now they want it from 2.14 to 2.63 million rubles. depending on configuration.
The company’s official website states: Prices are discounted only for cars produced in 2023 and are valid until the end of March..
In this context, sales of the brand’s cars increased. According to data from Passport Industrial Consulting JSC potential customers Analytical agency “Autostat” reported that in the 11th week of 2024 from March 11 to 17, Moskvich entered the top ten best-selling brands in Russia. It ranked ninth with 589 vehicles.
Reasons for price reduction
“The current decision to reduce prices by such significant amounts was due to the fact that the manufacturer had to empty the warehouses of cars produced last year. Oleg Moseev, founder of the Automarketer project, explained to socialbites.ca: It was clear that since they could not sell yet, they could only be sold by greatly reducing the price.
On the other hand, this price turned out to be the most demanded in the market, he added, adding that it is lower than the price of the original Chinese JAC JS4 (aka Moskvich 3). According to the expert, during large unit installation (assembly technology in which components completely ready for assembly are delivered from the manufacturer to the assembly site, usually in large units) this story will be unprofitable for Moskvich.
“It is clear that they (losses – socialbites.ca) are associated not only with operational activities, but also with commissioning work. If Moskvich manages to launch a full-fledged assembly this year (when the machine is assembled from separate parts and sub-assemblies with welding, painting and other work done on the production site)Moseev emphasized that the current price may be close to the price that will be offered for cars produced by welding and painting.
What to expect next?
Net loss of Moskvich according to reporting according to RAS (Russian accounting standards) For 2023, it increased by 3.6 times to 8.6 billion rubles. After last year’s stocks are exhausted, Moskvich may increase the price of cars by 150-200 thousand rubles, but it will not return them to their previous levels. Moseev predicts that sales of last year’s cars may continue in April.
“I feel that Moskvich’s miscalculations in strategy, marketing, product and price positioning have now been corrected. I hope this is a repositioning of the product and not a one-off promotion. “It would be strategically correct for Moskvich to occupy a niche between 1.6 and 2.3 million rubles,” Sergei Burgazliev, an independent consultant in the automotive industry, said in an interview with socialbites.ca.
The expert explained that thus, in terms of price, Muscovites will be among the most affordable crossovers of Chinese brands with AvtoVAZ products, which can benefit the brand, taking into account the choices offered to it and technological partnership with KamAZ.
According to him, if Moskvich plays in this niche, its sales in 2024 can increase by about 15-20% compared to last year’s results.
“I think sales volume is more important than profit margin for them right now.” (how much the business earns after deducting the costs of production of goods. – socialbites.ca)and hopefully they have strategically repositioned their vehicles. This will give them volume, increase sales velocity and ultimately increase capital turnover. They will earn less per unit of production, but their position will improve due to turnover and subsequent profits, sales of spare parts and an increase in the customer base,” concluded the expert.
socialbites.ca contacted the press service of Moskvich to ask questions about the reasons for the sharp decline in car prices and how this measure affects the expectations regarding the price positioning of Moskvich cars. There was no response from editors at the time of publication.
What are you thinking?
Source: Gazeta
Anika Rood is an author at “Social Bites”. She is an automobile enthusiast who writes about the latest developments and news in the automobile industry. With a deep understanding of the latest technologies and a passion for writing, Anika provides insightful and engaging articles that keep her readers informed and up-to-date on the latest happenings in the world of automobiles.