Dealers forecast further shrinkage in car demand in 2020 in Russia

Dealers forecast further shrinkage in car demand in 2020 in Russia


Autostat.- Despite the ongoing First and Family Car programmes, the Russian automobile market has shrunk this year, following a growth of almost two years. According to the forecast of the dealers, surveyed by Autostat, the demand for new automobiles will continue falling in 2020 in Russia.

The development director of Rolf Company Vladimir Miroshnikov is of the opinion that unless the government provides additional measures of stimulation for the automotive industry, alongside the already implemented First Car and Family Car programmes with a limit up to 1 million rubles (approximately $16,200), the shrinkage in demand may deepen. As a result, the car market may shrink by 8-10% in 2020 in Russia.

“I believe that the year 2020 will be a turning point for many dealers, as it will prove to be more and more difficult to maintain the efficiency and profitability of businesses by each passing month. Car prices will continue to increase not only due to the traditional upgrading of model ranges and the effects of annual inflation, but also due to the rising utilisation fees, which will make it impossible to expect a growth in car sales under such circumstances. We forecast a downward trend of 10% for the next year” – commented the operating director of AG Avilon Alexei Gulyaev.

On the other hand, Alexander Zakharov, the director of the key customer service department at AvtoSpetsTsentr Group of Companies, notes that the increase in the prices for new cars, associated with increased utilisation fees and inflation, will not be as significant as this year in 2020 in Russia, in connection with an increase in VAT and will be equivalent to 5-10% depending on the brand. Segment -mass production will be less affected in comparison with premium vehicles- and localisation are other factors having an impact on in price rises.

Avtovaz will grow, since it devours a significant share of state support. Korean brands and Renault should maintain their volumes. Skoda and Volkswagen will grow. The remaining Japanese and European brands in the mass-segment will lose volume. The Chinese will grow, on the contrary. Thereby, Lada, KIA, Hyundai, Renault, Skoda, Volkswagen and Toyota will remain as the main bestsellers in the Russian market. I’m of the opinion that they will finish next year exactly in that order. Surely, Haval will not be far behind the leading pack. Mercedes-Benz, BMW and Porsche will consolidate their positions in the premium segment. GAZ and Ford Transit will grow in the LCV segment. The remaining players are unlikely to experience growth. As a whole, the automobile market will remain at the same level as last year in 2020 in Russia” – as estimated by the general director of Alarm Motors Roman Slutsky.