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After the government of the Russian Federation decided to propel the Russian car market into a bright future with the “stick” of the recycling fee, Russian car retailers
The systematized picture of what is happening in the Russian car industry, which ROAD demonstrated today, makes a strong impression. If all goes as it goes, the country’s car owners are up to no good.
According to Aleksey Podshchekoldin, head of the ROAD, prices for new cars will increase by 5-10% by the end of the year. At current prices. Firstly, because our car market has a capacity of at least 1.5 million cars and light commercial vehicles per year, and the Russian car industry and importers can now supply up to 800,000 units of such vehicles. Lack of supply drives up prices. Moreover, in the second half of 2023, two factors will come into play at once that are extremely unpleasant for the wallet of a potential car owner.
The first is the Russian currency brought down by the efforts of the Central Bank of the Russian Federation. In the past few months, it has fallen from about 77 to 91 ₽ per dollar. And in our country, only Chinese cars occupy almost half of the car market. Plus foreign cars of Asian and European brands imported through parallel imports. Car dealers are now buying all of this at a new rate. That is about 16% more expensive than in the first half of 2023. Such a difference will not easily be reflected in the price tags in car dealerships. In addition, from August 1, the government decided to multiply the scrap collection of every car imported into Russia. Mr. Podshchekoldin gave an example of calculating the “increased scrap” for the brand new Chinese Jetta VA3 (analogue of the VW Polo).
Now the importing company for the import into Russia of each of these sedans pays a salvage fee of 178,000 rubles to the treasury. From August 1, the payment will be increased to 300,000 rubles. The difference of 122,000 rubles is immediately reflected in the price tag for the domestic buyer. For other popular foreign car models in Russia, the picture will be similar or even worse.
It is believed that an increase in the recycling fee will allow Russian car factories to compete with Chinese foreign cars. Such protectionism would be justified under normal economic conditions. But when at AVTOVAZ up to 80% (according to unofficial data) of the currently assembled LADA Vesta leaves the assembly line incomplete due to failures in the supply of parts, the introduction of additional barriers to the importation of cars amounts to strangling the domestic market.
Therefore, for its resuscitation, the ROAD has proposed to the Government of the Russian Federation to resume funding of the program for recycling old cars with the purchase of new cars. And postpone the increase in recycling levies. Car dealers also took the initiative to mutually recognize car certificates with China. On the one hand, this allows our importers to save on Russian certification of Chinese vehicles. And on the other hand, it will open the gigantic car market of the Middle Kingdom to domestic AvtoVAZ, UAZ, GAZ and KamAZ. The latter is not measured in hundreds of thousands (as in Russia), but in tens of millions of vehicles sold per year. Of course, it is doubtful that lobbyists for the interests of the Russian car industry in the Russian government will not destroy such an initiative. But what the hell isn’t kidding…
The systematized picture of what is happening in the Russian car industry, which ROAD demonstrated today, makes a strong impression. If all goes as it goes, the country’s car owners are up to no good.
According to Aleksey Podshchekoldin, head of the ROAD, prices for new cars will increase by 5-10% by the end of the year. At current prices. Firstly, because our car market has a capacity of at least 1.5 million cars and light commercial vehicles per year, and the Russian car industry and importers can now supply up to 800,000 units of such vehicles. Lack of supply drives up prices. Moreover, in the second half of 2023, two factors will come into play at once that are extremely unpleasant for the wallet of a potential car owner.
The first is the Russian currency brought down by the efforts of the Central Bank of the Russian Federation. In the past few months, it has dropped from about 77 to 91 ₽ per dollar. And in our country, only Chinese cars occupy almost half of the car market. Plus foreign cars of Asian and European brands imported through parallel imports. Car dealers are now buying all of this at a new rate. That is about 16% more expensive than in the first half of 2023. Such a difference will not easily be reflected in the price tags in car dealerships. In addition, from August 1, the government decided to multiply the scrap collection of every car imported into Russia. Mr. Podshchekoldin gave an example of calculating the “increased scrap” for the brand new Chinese Jetta VA3 (analogue of the VW Polo).
Now the importing company for the import into Russia of each of these sedans pays a salvage fee of 178,000 rubles to the treasury. From August 1, the payment will be increased to 300,000 rubles. The difference of 122,000 rubles is immediately reflected in the price tag for the domestic buyer. For other popular foreign car models in Russia, the picture will be similar or even worse.
It is believed that an increase in the recycling fee will allow Russian car factories to compete with Chinese foreign cars. Such protectionism would be justified under normal economic conditions. But when at AVTOVAZ up to 80% (according to unofficial data) of the currently assembled LADA Vesta leaves the assembly line incomplete due to failures in the supply of parts, the introduction of additional barriers to the importation of cars amounts to strangling the domestic market.
Therefore, for its resuscitation, the ROAD has proposed to the Government of the Russian Federation to resume funding of the program for recycling old cars with the purchase of new cars. And postpone the increase in recycling levies. Car dealers also took the initiative to mutually recognize car certificates with China. On the one hand, this allows our importers to save on Russian certification of Chinese vehicles. And on the other hand, it will open the gigantic car market of the Middle Kingdom to domestic AvtoVAZ, UAZ, GAZ and KamAZ. The latter is not measured in hundreds of thousands (as in Russia), but in tens of millions of vehicles sold per year. Of course, it is doubtful that lobbyists for the interests of the Russian car industry in the Russian government will not destroy such an initiative. But what the hell isn’t kidding…
Source: Avto Vzglyad
Donald Salinas is an experienced automobile journalist and writer for Div Bracket. He brings his readers the latest news and developments from the world of automobiles, offering a unique and knowledgeable perspective on the latest trends and innovations in the automotive industry.
