Spending on new cars in Russia fell by more than 50% last year, the automotive industry was significantly affected by Western sanctions introduced after the start of the Russian offensive on Ukraine, production was significantly reduced, prices increased, buyers chose cheaper second-hand models, it shows the data , analyzed by Reuters.

While analysts continue to debate the effectiveness of the sanctions against Russia, there is no doubt that they have hit the auto industry, which is heavily dependent on foreign automakers and imported components, hard.

Spending on new cars in Russia fell 52 percent to 1.5 trillion rubles ($20.4 billion) last year, while new car sales fell 58.8 percent.

Russia’s auto industry ended 2022 with its worst performance since the collapse of the USSR, with car production down 67% due to Western sanctions and an outflow of foreign manufacturers squeezing the market.

According to recently published data from the Federal Statistical Office (Rosstat), Russian factories produced 450,000 cars last year.

3 out of 4 cars sold in Russia in 2022 were used

Until 2022, the weakest year for car production in Russia since the collapse of the USSR in 1991 was 2009, after the global financial crisis, when Russian factories produced almost 600,000 cars, according to data from the analyst company ASM-Holding.

Total spending on new and used cars will fall more than 15% in 2022, according to Autostat, as inflation pushes up prices and lowers living standards, despite a 14% rise in used car spending.

Against this background, used cars accounted for almost three-quarters of all cars sold in 2022, up from 55% in 2021.

Inflation undermined the incomes of Russians

According to Rosstat, annual inflation of 11.9% last year led to a reduction of real disposable income in Russia by approximately 1%.

Anton, an employee of a large Russian company, bought a used Skoda in December, preferring a Western car to a Russian or Chinese one.

Priced at 2.5 million rubles, this Skoda is about a million rubles more expensive than it would be in 2021, but a million rubles cheaper than the new version of the brand.

Anton claims that he was lucky to find a used foreign car with low mileage, because stocks are running out.

According to Avtostat, the average price of new cars sold last year on the Russian market increased by 17% to 2.33 million rubles, while the price of used cars increased by 32% to 890,000 rubles.

In 2023, the new car market will grow slightly

The Czech Skoda Auto group announced that its deliveries to Russia will be reduced by 80% in 2022. Parent company Volkswagen has closed its factories in Russia and suspended imports, but has not yet agreed to a sale, as other carmakers have done.

The French group Renault sold a majority stake in the Russian car manufacturer AvtoVAZ to the Russian state for just one ruble with the possibility of redemption within six years. Similarly, Nissan sold its assets for one euro.

Analysts expect new car sales in the Russian market to rise to around 800,000 units this year from 687,370 in 2022, but well below the 1.6 million sold in 2021. (Agepres)

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