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Lada is losing ground
The decline in new car sales in Russia continues for the second year in a row. At the same time, if in 2013 the Russian car market fell by 5%, then this year it may fall as much as 12%, to 2.45 million cars. This is the current forecast of the Association of European Businesses (AEB). “Although Russia is one of the most promising car markets and is characterized by a low level of motorization and high deterioration of the vehicle fleet, under the influence of the economic situation and a decrease in the purchasing power of Russians, the demand for cars decreased in 2014,” says Anna Ozdelen, consultant at the Frost & Sullivan automobile market research department. - Compared to the crisis years of 2008-2009, the economic situation is more stable. Of course, the escalation of geopolitical tensions, new sanctions, a further drop in oil prices may lead to a more rapid sagging of the market.”
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2014 Auto News
AvtoVAZ remains the leader in the Russian car market, however, its advantage is melting every year. Sales of Lada cars in the past year fell stronger than the market - over 11 months by 16%, to 352 thousand cars (AEB data). As a result, AvtoVAZ’s market share reached a historic low of 15.9%, although five years ago it exceeded 25%.
According to AvtoVAZ, the downward trend in sales continues in the Russian car market, with brands showing the largest decline, in the model range of which budget cars predominate, while demand for premium cars is growing. “The main factors restraining the market this year: a decrease in the growth rate of key macroeconomic indicators, a slowdown in car lending, a weakening ruble,” commented in the AvtoVAZ press center.
Demand for Lada is plummeting as consumers of budget cars are particularly sensitive to higher prices and often rely on car loans, agrees Anna Ozdelen.
Not much help was Lada and the recycling program launched in September, according to which the Ministry of Industry and Trade this time rigidly determined quotas for each automaker. And although AvtoVAZ was allocated the largest number of utilization certificates - for 40 thousand cars - due to excessive demand, the plant has exhausted its limit in less than two months of the state program and was forced to suspend the sale of cars under it. True, it was soon decided to extend the “disposal” for 2015, and AvtoVAZ was able to resume accepting orders for utilization certificates, temporarily excluding the most popular Granta and Largus from the price list, for which there were lines. And then another problem arose - due to the sharply increased demand for Lada, some suppliers were unable to timely supply components to the VAZ conveyor, which even led to a temporary stop of the assembly line for Granta and Kalina. As a result, the plant was able to liquidate the lines for Granta and Largus and return them to the recycling program only in December.
Lada Granta remains the most popular model on the Russian market in 2014. However, over 11 months, its sales decreased by 9.5% compared to last year, to 139.4 thousand cars, despite the fact that since May this model has also become available in the liftback body. The fleet renewal program has noticeably spurred the implementation of the “Grants” program - every second Lada car sold under utilization certificates fell on this particular model. As a result, in September and October, AvtoVAZ was able to increase sales of its bestseller by 12% and 26%, respectively. However, due to the same problems with suppliers, in November the Lada Granta sales collapsed by 17%, while the model lost the title of the best-selling car in Russia - for the first time in the history of the Russian car market, it became a foreign car - Kia Rio.
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Meanwhile, in 2015, AvtoVAZ has every chance to strengthen its position against the background of a sharp increase in prices for foreign cars. “Unlike companies with a low level of localization and importers, a rapid increase in prices for AvtoVAZ products is not expected. On the other hand, additional measures, such as a recycling program, are needed to maintain Lada's sales volumes at a stable level,”says Anna Ozdelen. Promising new products - Vesta and XRAY should spur AvtoVAZ sales next year, adds Arkady Shmatov, director of the service center of the Arkan group of companies. AvtoVAZ plans to start production of these models next fall, and in 2016 they will be followed by a new crossover Lada XRAY Cross.
Redistribution of the market of foreign cars
Perhaps the main intrigue of the outgoing year remains on the foreign car market, where Renault and Kia are fighting for the palm. French Renault, which became the best-selling foreign brand in 2013, has maintained its leadership position throughout the current year. This was facilitated by a fairly steady demand for the Duster crossover, as well as the successful launch of the new Logan and Sandero. However, thanks to high sales in November, Kia was able to break out into the leaders among foreign cars for the first 11 months. At the same time, the advantage of the Korean brand is insignificant (175.5 thousand cars sold versus 175.3 thousand cars from Renault), so the outcome of the struggle for the title of “best-selling foreign car of 2014” will be known only at the beginning of next year.
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“Of course, we focus on maintaining our existing positions - at least a confident second place among foreign brands in Russia,” said Artyom Gusarov, Managing Director of Kia Motors Rus, at “Driving. Russian Federation”. - With any development of events, we strive to get ahead of the market by updating the lineup, new special offers and effective management of the dealer network. Recycling and trade-in programs, our marketing programs, promotions - this is exactly what allows the company not only to reduce the pace of sales decline, but also to keep them at a decent level. In addition, we are currently working with a minimal price increase.”
Hyundai holds an honorable third place in the market of foreign cars, which in January-November was able to maintain sales almost at last year's level - 164.4 thousand cars (-2%). At the same time, the bestseller of the brand - Hyundai Solaris - for the fourth year in a row has steadily become the best-selling foreign car model in Russia. Hyundai Motor CIS PR-manager Julia Tikhonravova explains the preservation of Hyundai's leading position in the Russian market by the combination of a competent marketing policy with a high-quality and sought-after product. “In addition, the availability of proven models such as the Solaris or ix35 also have a positive effect on overall sales dynamics,” she says. - In 2014, we introduced a new version of our bestseller - Solaris, which further increased interest in this model. We confidently took our niche in the premium segment as well - Equus holds fourth place, beating Japanese and English competitors. An important factor is a moderate pricing policy throughout the year, as well as the availability of cars at dealerships and a number of marketing programs.”
Significantly improved its position in the Russian market Toyota, which this year was able to outperform such massive brands as Chevrolet and Volkswagen. For 11 months of 2014, sales of the Japanese brand in Russia increased by 3%, to 144.4 thousand cars. “The success is explained by the fact that Toyota is positioned as a brand at the junction of the mass and premium segments, and the latter, as you know, continues to show dynamics much better than the market. We focus on SUV segments and business sedans. 54% of Toyota’s sales in Russia currently account for crossovers and SUVs. The Camry sedan accounts for 21.5% of Toyota brand sales in Russia,”comments Evgenia Teterina, Toyota Motor, Senior Public Relations Specialist. “The successful launch of new and updated models, as well as trim sets specially adapted for Russian conditions, allowed us to increase our share in the falling market.”
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The largest losses in the past year were suffered by such mass brands as Volkswagen (-20% for 11 months of 2014), Chevrolet (-30%) and Ford (-40%). Ford Sollers explains the drop in sales this year as serious changes in the economic situation in Russia, in particular, the devaluation of the ruble, a slowdown in consumer activity in the new car market, and a significant drop in demand for C-segment cars. So, sales of Ford Focus in January-November collapsed almost 2.5 times, and yet this model still forms the basis of the brand’s sales on the Russian market.
The opening of the year was the revived Renault-Nissan alliance budget brand Datsun, which in September began selling the new Datsun on-DO sedan in Russia, designed specifically for the Russian market on the Granta / Kalina vaz platform. Despite the general drop in demand in the budget segment, Datsun on-DO sales are growing every month - in November they exceeded 4 thousand cars, which is comparable to the sales volume of sedans such as Volkswagen Polo and Nissan Almera. And in just the first three months of sales of their customers found more than 6.3 thousand on-DO. According to the director of Datsun in Russia, Jerome Sego, the dynamic growth of sales of this model in the first three months suggests that the new product is gradually taking its place in the market and gaining the interest and trust of customers. “For us, this is confirmation of the movement in the right direction,” he notes. At the beginning of next year, the second Datsun model, developed for the Russian market, should appear on sale - the mi-DO hatchback.
Chinese gambit
Over the past few years, Chinese automakers have set new sales records in Russia, but in the past year, sales of Chinese cars have fallen more than the market. The leader of the Chinese segment remains Lifan, whose sales for 11 months of this year decreased by 19%, to 19.7 thousand cars. Russian dealers Geely reduced sales by 34%, Chery - by 14%, Great Wall - by 22%.
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“In any country, against the backdrop of a general market decline, in the first place, sales of budget cars are reduced more. The premium class is already for sale, the rich can only get rich or maintain their status,”comments Sun Tsejun, CEO of Lifan Motors Rus. - In addition, the current year 2014 began for us with the introduction of a recycling fee, the amount of which did not depend on the initial cost of the car. An increase in the cost of all cars by the same amount leads to a greater percentage increase in prices precisely in our segment, where most Chinese manufacturers are located. For the same reason, the increase in tariffs for car transportation has also played primarily against us.”
According to Anna Ozdelen, the products of Chinese automakers are aimed at low / middle-income consumers who have reacted most strongly to the situation in the economy. “In addition, demand for some Chinese brands has previously been low. Such brands will be forced to leave the Russian market,”she said.
However, while the opposite picture is observed - in Russia there are more and more new automakers from the Middle Kingdom. Only this year, Chinese brands such as Changan, JAC, Brilliance, DongFeng began or resumed sales of cars, and the premium brand Haval is preparing for its debut. Moreover, for the first time in 10 years of presence on the Russian market, automakers from China began investing in the creation of their own facilities in our country. This year, Great Wall and Lifan began to build factories, considering Changan, Hawtai and Haima.
Lifan X50
The premiere of the Lifan X50 crossover at the Moscow International Auto Show - 2014. Photo: Kirill Savchenko The premiere of the Lifan X50 crossover at the Moscow International Auto Show - 2014. Photo: Kirill Savchenko The premiere of the Lifan X50 crossover at the Moscow International Auto Show - 2014. Photo: Kirill Savchenko
“Chinese brands have great potential in Russia, but so far it has not been realized largely due to the fact that the Russian authorities did not really support the opening of Chinese automobile production in Russia. Now this approach has changed: in the past year, a number of Chinese companies began to actively develop their production capacities. However, it will take some time before the release of Chinese cars in Russia reaches full capacity, and this will affect the sales of “Chinese cars” in our country,”says Arkady Shmatov.
Gone, but promised to return
As the Chinese auto industry continues to expand into Russia, other global automakers are leaving the once-promising market. So, due to low demand for their cars this year, American Dodge, Spanish SEAT and Taiwanese Luxgen announced the cessation of sales in the Russian market. At the same time, SEAT and Luxgen do not exclude their return to the automotive market of our country, which in the future has significant growth potential. “Initially, the demand for SEAT, Dodge and Luxgen remained weak, and the devaluation of the ruble further reduced their competitiveness. On the other hand, sales of these brands may resume with the restoration of the car market. For example, SEAT has already left Russia many times,”says Anna Ozdelen.
According to experts, due to the devaluation of the ruble and a drop in demand, other automakers who have no localized production in our country, and the sales volume is already small, can curtail sales in Russia. “It is entirely possible that Fiat will have tough times in the coming year. At one time, she quarreled with her long-time Russian partner Sollers, and now sales of this brand in Russia are steadily declining,”says Arkady Shmatov.
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And the crisis is nothing
Traditionally, the crisis in the car market was least affected by sales of premium cars. According to the results of 11 months of 2014, the leader of this segment of Mercedes-Benz increased sales by 12%, to 45 thousand cars. This year's sales growth is also shown by such premium brands as Lexus (+ 24%), Land Rover (+ 1%), Volvo (+ 4%) and Porsche (+ 19%). One of the leaders in the premium segment remains Audi, which, with a general decline in sales, has noted record demand for a number of its models.
Top 25 best-selling car models in Russia
| # | Model | Mark | January-November | ||||
| 2014 | 2013 | Rev. to APPG | |||||
| one | Granta | Lada | 139, 405 | 154, 028 | -9.5% | ||
| 2 | Solaris | Hyundai | 105, 142 | 105, 167 | 0% | ||
| 3 | New rio | KIA | 84, 350 | 82, 871 | 1.8% | ||
| four | Duster | Renault | 69, 576 | 75, 726 | -8.1% | ||
| five | Largus | Lada | 60, 401 | 51, 361 | 17.6% | ||
| 6 | Kalina | Lada | 59, 403 | 59, 370 | 0% | ||
| 7 | Logan | Renault | 54, 073 | 46, 757 | 15.6% | ||
| eight | Polo | Volkswagen | 52, 523 | 65, 916 | -20.3% | ||
| 9 | Priora | Lada | 42, 614 | 52, 351 | -18.6% | ||
| ten | Almera | Nissan | 42, 220 | 12, 676 | 233.0% | ||
| eleven | 4x4 | Lada | 38, 415 | 49, 409 | -22.3% | ||
| 12 | Niva | Chevrolet | 36, 952 | 47, 035 | -21.4% | ||
| 13 | Rav4 | Toyota | 34, 114 | 36, 317 | -6.1% | ||
| 14 | Sandero | Renault | 33, 269 | 39, 842 | -16.5% | ||
| 15 | Octavia A7 | Skoda | 33, 051 | 9, 630 | 243.2% | ||
| sixteen | ix35 | Hyundai | 31, 363 | 29, 182 | 7.5% | ||
| 17 | Camry | Toyota | 29, 941 | 30, 112 | -0.6% | ||
| 18 | Qashqai | Nissan | 27, 323 | 34, 304 | -20.4% | ||
| nineteen | Sportage | Kia | 27, 246 | 30, 364 | -10.3% | ||
| 20 | Cruze | Chevrolet | 27, 241 | 50, 106 | -45.6% | ||
| 21 | New cee'd | Kia | 27, 206 | 31, 475 | -13.6% | ||
| 22 | Corolla | Toyota | 25, 612 | 27, 347 | -6.3% | ||
| 23 | Outlander | Mitsubishi | 24, 588 | 23, 592 | 4.2% | ||
| 24 | Focus | Ford | 24, 104 | 59, 552 | –59.5% | ||
| 25 | X-trail | Nissan | 22, 251 | 24, 021 | -7.4% | ||
Source: European Business Association
“Despite the crisis, some models have become more in demand than before. This applies to the A3 sedans, which we transfer 300 cars a month, and sometimes they are even not enough, as well as the A6 business class sedan, the demand for which grew by a record 17%,”says the head of Audi in Russia, Akhim Zaurer. - Premium brands really feel better than the market as a whole. It can be assumed that our customers are less affected by the recession and have sufficient income so as not to lower the level of their daily life or to lower it insignificantly. Therefore, with the market for passenger cars falling by 11.6%, Audi's position is quite stable - 8%. It is worth noting that we, like our competitors from the big German three, were forced to raise retail prices, which, of course, cannot positively affect demand. But we are trying to minimize the consequences of the changes for customers - our prices are rising, like everyone else, but at a much lower rate than inflation and rate fluctuations."
The devaluation of the ruble and the expectation of rising prices in 2015 led to a surge in sales of premium cars in November and December. But in the coming year, demand for them may decrease significantly, says Arkady Shmatov. “Unlike mass foreign automobile brands, many premium brands do not have their full production in Russia, therefore it is in the premium segment that we should expect a serious jump in prices due to the devaluation of the ruble,” the expert explains.
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The new generation of Audi Q7 The new generation of Audi Q7 The new generation of Audi Q7
Hope for new items
The booming demand for cars in recent months is typical not only for premium brands, but for the entire Russian car market. According to dealers, buyers are literally sweeping cars from the salons, trying to become the owner of a new car until the next price increase. Meanwhile, automakers change price lists after the exchange rate almost every week, and some have already rewritten their price tags in arbitrary units. In the conditions of the collapse of the ruble, we are not talking about any New Year's discounts - even illiquid cars are now being sold, and dealer warehouses are empty before our eyes. At the same time, some distributors, including Jaguar Land Rover, GM and Audi, suspended supplies to dealers until the ruble stabilized.
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Given the uncertain economic situation, market participants find it difficult to make forecasts for next year. According to Artem Gusarov, the factors affecting the market still remain unchanged - oil prices, ruble devaluation, sanctions. “We closely monitor the economic situation in the country and in the world, and take into account all of the above factors when planning further work,” he says.
Now one thing is clear: car sales will continue to fall, and the recycling program extended by the government for next year will not help to contain it. According to Arkady Shmatov, “recycling”, by definition, could not significantly support demand - the allocated certificates were barely enough for 5% of the market sales. “This program and its extension next year has more psychological significance, which suggests that the state is worried about the car market and is taking measures to support it. And if the decline is even more significant, then more substantial steps to stimulate sales are possible,”the expert argues. In his opinion, the decline in the Russian car market next year will not be as significant as in the crisis of 2009, but will be a maximum of 20–25%.
“We are preparing for a 30% drop in the market. Personally, I do not exclude an even more pessimistic scenario if the price of the euro in the spring is 120 rubles. “New models that we plan to bring to the Russian market should help us a bit to smooth the decline in demand,” says Sun Tsejun of Lifan Motors Rus.
Hyundai Motor CIS also expects to support its sales in 2015 by updating the Hyundai lineup. “We believe that a crisis is always a time of chances and hope to maintain a leading position. Including thanks to the expected news - Tucson new generation, an updated version of Santa Fe and the new i40. We also see ongoing demand for Solaris, which will help us remain leaders,”says Yulia Tikhonravova.
The premier promises to present a whole gamut in Russia and Audi, and the most important among them is the new generation Q7. “Next year, new models will help us demonstrate positive momentum. Crises pass, so now we need to prepare for a new rise,”said Achim Zaurer.
По мнению экспертов, с учетом относительно низкого уровня автомобилизации в нашей стране и при благоприятном развитии экономической и политической ситуации российский авторынок может вернуться к росту уже в 2016 году. «Все зависит от состояния экономики. Если политическая ситуация разрешится и цены на нефть вырастут, мы можем ожидать восстановления покупательной способности», - резюмирует Анна Озделен.
Продажи новых легковых автомобилей и LCV в России
| Mark | Январь-ноябрь | ||
| 2014 | 2013 | Изм. к АППГ | |
| Lada | 351, 992 | 417, 361 | -16% |
| KIA | 175, 491 | 181, 994 | -four% |
| Renault | 175, 268 | 191, 215 | -8% |
| Hyundai | 164, 396 | 166, 982 | -2% |
| Toyota | 144, 418 | 140, 070 | 3% |
| Nissan | 141, 879 | 128, 779 | ten% |
| Volkswagen | 114, 200 | 142, 699 | -20% |
| Chevrolet | 109, 687 | 155, 894 | -thirty% |
| Skoda | 78, 223 | 78, 943 | -one% |
| Mitsubishi | 67, 432 | 70, 318 | -four% |
| GAS | 61, 472 | 75, 014 | -18% |
| Opel | 58, 151 | 72, 594 | -20% |
| Ford | 56, 807 | 94, 358 | -40% |
| Mercedes Benz | 44, 955 | 40, 211 | 12% |
| Mazda | 43, 667 | 38, 807 | 13% |
| UAZ | 42, 623 | 45, 188 | -6% |
| Daewoo | 35, 355 | 54, 633 | -35% |
| BMW | 31, 927 | 37, 888 | -16% |
| Audi | 31, 031 | 33, 565 | -8% |
| Ssangyong | 22, 599 | 30, 787 | -27% |
| Lifan | 19, 753 | 24, 285 | -19% |
| Land rover | 19, 078 | 18, 809 | 1% |
| Peugeot | 18, 980 | 31, 117 | -39% |
| Honda | 18, 570 | 22, 676 | -18% |
| Citroёn | 17, 738 | 26, 418 | -33% |
| Lexus | 17, 661 | 14, 294 | 24% |
| Suzuki | 17, 338 | 25, 576 | -32% |
| Geely | 16, 122 | 24, 26 | -34% |
| Chery | 15, 219 | 17, 754 | -14% |
| Subaru | 14, 923 | 15, 177 | -2% |
| Great wall | 14, 118 | 18, 04 | -22% |
| Volvo | 13, 964 | 13, 416 | four% |
| Volkswagen ком.авт. | 11, 423 | 14, 180 | -19% |
| Mercedes-Benz ком.авт. | 8, 106 | 4, 447 | 82% |
| Infiniti | 7, 392 | 7, 733 | -four% |
| Jeep | 7, 167 | 4, 481 | 60% |
| Fiat | 6, 791 | 7, 127 | -5% |
| Datsun | 6, 310 | - | - |
| Porsche | 4, 030 | 3, 382 | nineteen% |
| Faw | 2, 164 | 4, 366 | -50% |
| Mini | 1, 538 | 2, 516 | -39% |
| Jaguar | 1, 505 | 1, 553 | –3% |
| Seat | 1, 486 | 3, 221 | -54% |
| Cadillac | 1, 167 | 1, 384 | -16% |
| Baw | 1, 016 | 1, 472 | -31% |
| Changan | 996 | - | - |
| Acura | 819 | - | - |
| Haima | 780 | 326 | 139% |
| Brilliance | 650 | - | - |
| Isuzu | 578 | 196 | 195% |
| Zaz | 481 | 3, 04 | -84% |
| Jac | 384 | - | - |
| smart | 328 | 175 | 87% |
| TagAZ | 129 | 359 | -64% |
| Chrysler | 107 | 151 | -29% |
| Bogdan | 92 | 1, 994 | -95% |
| Luxgen | 81 | 27 | 200% |
| Alfa romeo | 81 | - | - |
| Foton | 63 | 6 | 950% |
| Dodge | 26 | 188 | -86% |
| Иж | nineteen | 684 | -97% |
| BYD | five | 105 | -95% |
| Total | 2, 220, 751 | 2, 513, 240 | - 11, 6% |
