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Why there is no “people’s car” in Russia and it is unlikely when there will be

The dream of millions of Russian motorists: an inexpensive, comfortable and reliable car for the whole family. But in the near future it probably won’t come true.

“People’s car” is a real “idea fix” of the domestic car market. Once upon a time, an ever-memorable Zhiguli claimed the role of such a vehicle. But then (in Soviet times) this kind of mass-produced car cost like a small Moscow apartment, and you could buy it only with “connections” in the distribution network or at a speculative price from resellers. Later, when foreign brands came to Russia, various models tried on the role of the “people’s car”. From the French Renault Logan and the American Ford Focus to the first desperately stinking phenol and quickly rusting “Chinese”, which began to enter our market just as the “French” and “Americans” clearly began to rise in price.

For objective reasons, as well as because of the attitude to AVTOVAZ products known to the Russian people, all these LADA Kalina, Priora and Granta did not become “popular”. Relatively cheap yes. But no people. And now LADA Granta (the most affordable model of the Togliatti brand) costs about the same as a larger sedan produced at VW’s Chinese plant. That is why, if it were not for the protective customs duties, the domestic auto industry would have come to a complete and final end long ago – as chronically “unable to compete”.

As a result, a dire situation has developed in the Russian car market. When a mass buyer simply does not have the money to buy cars at the prices dealers are now “rolling” him out. Where earlier car loans accounted for about half of new car sales, now this share is rapidly approaching almost 100%! We are exaggerating, of course, but the volume of loans issued by banks for the purchase of cars this spring exceeded the indicators of the “fat” 2013. Although more than 1.5 million new cars were sold per year in Russia then, and this year – God forbid, to creep up to 800,000!

People don’t have money for cars. And you have to drive. You have to take out insane loans and fulfill the dream of the future “people’s car”. So that in terms of features it should resemble the still widely loved Toyota Camry in a rich configuration. And no more than 500,000 rubles in the salon of an official dealer! Somehow, yes…

But the whole point of this dream is that we put the cart before the horse. We are constantly trying to adjust the price we want for an ideal car to, roughly speaking, the salary of the potential buyer. Meanwhile, “dance” should be on the other side. First you need to look at the real average household income (since we are talking about a family car model), and only then try to find a suitable vehicle for it.

For example, in China, the most promising and massive car buyer now has a household income of 200,000-300,000 yuan per year. This is equivalent to 2.28-3.42 million rubles (190,000-285,000 rubles per month for a family). In Russia, the monthly average income per capita per family member last year turned out to be 22,000 rubles, for a family of the “Chinese” type (of two adults and one only child) this is a total of 66,000 rubles

It is clear that in this way – in the forehead – it is not entirely correct to compare Russian and Chinese conditions. But for a qualitative assessment of the situation, a comparison of 66,000 and at least 200,000 rubles is quite acceptable. Three or even four times as much difference!

And what is the conclusion of all the above, you ask? And this is: a truly affordable “people’s car” in modern conditions (even the same Chinese VW for 600,000 rubles with our money) can appear only in a country where the majority of residents (in general, everyone, and not just officials and IT specialists in bankers and oilmen) incomes are many times higher than in Russia today. In the meantime, this is and is not expected in the near future, one can only dream of an inexpensive, beautiful and reliable “people’s car”. And the same “people” will have to ride on rusting and falling apart used “Chinese”.

globallookpress.com’s photo
globallookpress.com’s photo

“People’s car” is a real “idea fix” of the domestic car market. Once upon a time, an ever-memorable Zhiguli claimed the role of such a vehicle. But then (in Soviet times) this kind of mass-produced car cost like a small Moscow apartment, and you could buy it only with “connections” in the distribution network or at a speculative price from resellers. Later, when foreign brands came to Russia, various models tried on the role of the “people’s car”. From the French Renault Logan and the American Ford Focus to the first desperately stinking phenol and quickly rusting “Chinese”, which began to enter our market just as the “French” and “Americans” clearly began to rise in price.

For objective reasons, as well as because of the attitude to AVTOVAZ products known to the Russian people, all these LADA Kalina, Priora and Granta did not become “popular”. Relatively cheap yes. But no people. And now LADA Granta (the most affordable model of the Togliatti brand) costs about the same as a larger sedan produced at VW’s Chinese plant. That is why, if it were not for the protective customs duties, the domestic auto industry would long ago have come to a complete and final end – as chronically “unable to compete”.

As a result, a dire situation has developed in the Russian car market. When a mass buyer simply does not have the money to buy cars at the prices dealers are now “rolling” him out. Where earlier car loans accounted for about half of new car sales, now this share is rapidly approaching almost 100%! We are exaggerating, of course, but the volume of loans issued by banks for the purchase of cars this spring exceeded the indicators of the “fat” 2013. Although more than 1.5 million new cars were sold per year in Russia then, and this year – God forbid, to creep up to 800,000!

People don’t have money for cars. And you have to drive. You have to take out insane loans and fulfill the dream of the future “people’s car”. So that in terms of features it should resemble the still widely loved Toyota Camry in a rich configuration. And no more than 500,000 rubles in the salon of an official dealer! Somehow, yes…

But the whole point of this dream is that we put the cart before the horse. We are constantly trying to adjust the price we want for an ideal car to, roughly speaking, the salary of the potential buyer. Meanwhile, “dance” should be on the other side. First you need to look at the real average household income (since we are talking about a family car model), and only then try to find a suitable vehicle for it.

For example, in China, the most promising and massive car buyer now has a household income of 200,000-300,000 yuan per year. This is equivalent to 2.28-3.42 million rubles (190,000-285,000 rubles per month for a family). In Russia, the monthly average income per capita per family member last year turned out to be 22,000 rubles, for a family of the “Chinese” type (of two adults and one only child) this is a total of 66,000 rubles

It is clear that in this way – in the forehead – it is not entirely correct to compare Russian and Chinese conditions. But for a qualitative assessment of the situation, a comparison of 66,000 and at least 200,000 rubles is quite acceptable. Three or even four times as much difference!

And what is the conclusion of all the above, you ask? And this is: a truly affordable “people’s car” in modern conditions (even the same Chinese VW for 600,000 rubles with our money) can appear only in a country where the majority of residents (in general, everyone, and not just officials and IT specialists in bankers and oilmen) incomes are many times higher than in Russia today. In the meantime, this is and is not expected in the near future, one can only dream of a cheap, beautiful and reliable “people’s car”. And the same “people” will have to ride on rusting and falling apart used “Chinese”.

Source: Avto Vzglyad

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