According to data recently released by the Russian Association of European Businesses (AEB) website, in June this year, sales of passenger cars and light commercial vehicles in Russia were 28,000 units, down 82% year-on-year. In recent months, monthly sales of Russian cars have fallen by about 80% year-on-year, and car sales in some months have also hit the lowest level since 1991.
In the first half of 2022, Russian car sales were 370,000 units, down 56.9% year-on-year. There are two reasons for the decline of the Russian car market. First, since the conflict between Russia and Ukraine, many European car brands have stopped production and export. Second, the localization level of Russian cars is very low, and there are still about 70-80% of passenger cars. Parts rely on imports, and the inability of parts to be in place makes it impossible for some OEMs to carry out effective production. However, because Russian auto parts suppliers usually prepare 3 to 4 weeks of inventory, there was no significant decline in initial sales. But over time, the difficulties faced by Russian car production have gradually increased, and the supply of some parts has been interrupted due to exchange rate and logistical factors.
It is worth noting that the market share of Chinese brands in Russia is increasing. In June this year, a total of 6,875 Chinese brand cars were sold in Russia, accounting for 21% of the Russian market share, a record high. In the first quarter of this year, Chinese brand cars accounted for only 9.5% of the Russian market.
The Russian auto market analysis agency Avtostat previously predicted that by the end of this year, the Russian auto market will decline back to the situation it was 15 years ago. Sergey believes that the market has already experienced a sharp decline, and if the situation continues to deteriorate, passenger car sales are expected to reach 500,000 to 550,000 units by the end of this year. In 2021, the sales of passenger cars in Russia will reach about 1.5 million, which means that the decline in passenger car sales in Russia this year may reach 60%.
