In Russia, car owners have become more inclined to keep cars that are up to seven years old and postpone the purchase of new models. The publication writes about this "Kommersant". Sales of seven-year-old cars are falling faster than the overall market, with their share falling below 20% for the…
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Russians less likely to sell cars 03:14
By
ANIKA
June 21, 2024
In Russia, car owners have become more inclined to keep cars that are up to seven years old and postpone the purchase of new models. The publication writes about this
“Kommersant”.
Sales of seven-year-old cars are falling faster than the overall market, with their share falling below 20% for the first time since 2017. Dealers explain this trend by the reluctance of customers to switch to Chinese cars from relatively new European and Korean brands in an environment of high interest rates and prices.
Experts also point to a general decline in the supply of new cars to the market after the 2015 crisis.
Even fewer new cars are being sold on the second-hand car market, according to Autostat data. According to analysts, from January to May, sales of cars under seven years old fell 7.3% to approximately 440 thousand units. Between 2018 and 2023, seven-year-old cars accounted for more than 20% of the market, while the segment’s share fell to 19%. The dynamics of this segment are noticeably worse than the general secondary market, which showed a slight decrease in sales by 0.1% for five months.
Offers in the up to seven-year segment on the Avto.ru platform in May 2024 decreased by 8% compared to December 2023, while in the January-May period they increased by 1.1% compared to the previous year. A service representative stated that car owners are postponing vehicle replacement due to the significant increase in prices and changes in the new car supply structure.
Andrei Grishakov, director of the used car department of companies Avtodom and Avtospetstsentr, added that customers are now replacing cars that are about ten years old. He notes that many customers do not yet trust Chinese manufacturers, and it is difficult to purchase alternatives to seven-year-old European, Japanese or Korean cars due to the absence of these brands on the Russian market.
Arkady Grigoriev, head of the marketing and public relations department of the Boriskhof company, adds that many car owners refuse to purchase new models due to high loan interest rates and the general increase in the cost of money. He notes that new cars with mileage up to seven years show good and predictable liquidity.
Roman Titov, Deputy General Manager of Avilon Second-Hand Cars, reported that there is currently a shortage in all second-hand car segments. Some owners of European and Korean brands are postponing sales if they cannot find a replacement. According to him, new cars continue to come out of the market and are replaced in small quantities. Avto.ru experts also note that the decrease in sales of new cars affects the supply in the secondary market.
Automotive analyst Vladimir Bespalov points out that the decrease in the number of cars under seven years old is also explained by the decrease in the volume of the new car market after the 2015 crisis. That year, sales of new passenger cars in Russia fell by 36% due to the depreciation of the ruble, the biggest market crash since 2009.
Since then, the automobile market has not reached the sales volume of 2.5 million new cars. According to the European Enterprise Association, approximately 1.6 million passenger cars and light commercial vehicles were sold annually in 2017 and 2020. The expert states that the low entry of new cars after the crisis led to a decrease in the supply in the market.
Also, according to Vladimir Bespalov, saddle cars and younger cars are becoming more interesting for buyers due to the high prices of new models and obvious advantages in technical characteristics.
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Source: Gazeta
