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Cars will become more expensive because we buy them anyway

  • November 7, 2023
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Finally, the Central Bank of Russia got involved in driving up already unorthodox car prices – it didn’t have to wait long. The AvtoVzglyad portal predicted how Russian

Finally, the Central Bank of Russia got involved in driving up already unorthodox car prices – it didn’t have to wait long. The AvtoVzglyad portal predicted how Russian drivers, who are already in a difficult situation, will now behave.

The last thing the fathers of all reforms remember is the people. They worry about everything – inflation, the ruble exchange rate, the health of the banks, the macroeconomic financial situation – in short, all that liberal tinsel intended to explain the high level of salaries of experts who seem to analyze it successfully. .

Recycling collection to help you

Taking advantage of the departure of global brands due to the Russian Federation, the remaining car companies joyfully rushed to rewrite price lists – with the full cooperation of regulatory, anti-monopoly and tax authorities. Prices have skyrocketed and there are virtually no ‘Chinese’ models cheaper than two lyams on sale. But this didn’t seem enough. A new disaster has befallen the hapless Russian car market: a rise in recycling costs. Of course, the stated goals were the most noble: the fight against importers and resellers and the localization of foreign production in Russia.

That may of course be true, but in reality the end consumer always pays for everything. So in this case, car prices have not slowed down in response to growth – sometimes by 50 thousand, sometimes by 150 thousand and sometimes by 300 thousand rubles. Moreover, we are not talking about premium cars supplied via parallel imports, but about relatively affordable models such as Tiggo 4 Pro or Changan CS85. Even the usually indifferent Rosstat bothered to note the general price increase of Russian cars by 1.7% after the indexation of the recycling contribution.

Heavy artillery

As a result of these manipulations, the weighted average price for passenger cars rose from 2.38 million at the end of last year to 3.13 last August, according to the Autostat agency. The marketing agency NAPI also analyzed the increase in retail prices and came up with an equally “optimistic” picture. In August, 127 trim levels increased in price, and another 81 trim levels increased in September. In October, prices rose by 53 trim levels; on average, car prices rose from 0.2%, such as the Geely Tugella Flagship, to 8.4%, such as the BAIC X55 Elite LV4.

I should stop there and calm down, but no. It was worth preparing for the worst, according to Ensign Dauerling’s prescriptions: “You’re afraid, coward, of your trunk, but what are you going to do when the heavy artillery starts talking?”

And the heavy artillery in the form of the Central Bank came to the fore and again raised the policy rate in an attempt to stop the fall of the ruble – from 13% to 15%. It is not difficult to guess what such a step will lead to, and in the near future: to an immediate increase in the cost of bank loans. And this problem will directly affect motorists.

Firstly, borrowed money will become more expensive for car sellers – and they have nowhere to go, they urgently need working capital. Any idea who will ultimately pay for this? Secondly, interest rates on private car loans will rise, perhaps even to an unaffordable 23% – 24%.

All the bells are ringing

Alexey Podshchekoldin, Chairman of ROAD, once again sounds the alarm: “Such action on the part of the Central Bank will have a negative impact on the entire market, including car retail. Recently, more than 50% of the new car market and 30-40% of the secondary car market have been sold on credit. The current rate increase will bring an increase in car loan rates, which will reduce sales by 15-20%. This will affect cars of all brands – both foreign and domestic manufacturers. At the same time, a decrease in sales volume will lead to a decrease in the profitability of automotive retailing, to the threat of closure, and, accordingly, to tax revenues for the state budget. We turned for support to specialized associations defending the country’s entrepreneurial community: the Russian Union of Industrialists and Entrepreneurs, OPORA Russia, the Chamber of Commerce and Industry of the Russian Federation and the Commissioner for the Protection of Entrepreneurs’ Rights in Moscow. We will prepare a joint appeal.”

Dear Mr. Podshchekoldin, you are absolutely right if you intend to ring all the bells. But those who govern the domestic economy are not interested in your (or ours for that matter) problems. They are confident that they can shift all the financial burden onto the people’s shoulders, and our flexible driver will buy cars at whatever price they charge him.

Unfortunately, they have plenty of reasons for such optimism. Here are the data from the Autostat agency on new car sales in the second half of 2023: July – 95,654 units, August – 109,731 units, September – 110,358 units. Hence the mathematically accurate prediction: no catastrophe is expected in the car market, no matter how some car experts tell us otherwise. We’ll just tighten our belts, but this isn’t the first time.

Photo globallookpress.com
Photo globallookpress.com

The last thing the fathers of all reforms remember is the people. They worry about everything – inflation, the ruble exchange rate, the health of the banks, the macroeconomic financial situation – in short, all that liberal tinsel intended to explain the high level of salaries of experts who seem to analyze it successfully. .

Recycling collection to help you

Taking advantage of the departure of global brands due to the Russian Federation, the remaining car companies joyfully rushed to rewrite price lists – with the full cooperation of regulatory, anti-monopoly and tax authorities. Prices have skyrocketed and there are virtually no ‘Chinese’ models cheaper than two lyams on sale. But this didn’t seem enough. A new disaster has befallen the hapless Russian car market: a rise in recycling costs. Of course, the stated goals were the most noble: the fight against importers and resellers and the localization of foreign production in Russia.

That may of course be the case, but in reality the end consumer always pays for everything. So in this case, car prices have not slowed down in response to growth – sometimes by 50 thousand, sometimes by 150 thousand and sometimes by 300 thousand rubles. Moreover, we are not talking about premium cars supplied via parallel imports, but about relatively affordable models such as Tiggo 4 Pro or Changan CS85. Even the usually indifferent Rosstat bothered to note the general price increase of Russian cars by 1.7% after the indexation of the recycling contribution.

Heavy artillery

As a result of these manipulations, the weighted average price for passenger cars rose from 2.38 million at the end of last year to 3.13 last August, according to the Autostat agency. The marketing agency NAPI also analyzed the increase in retail prices and came up with an equally “optimistic” picture. In August, 127 trim levels increased in price, and another 81 trim levels increased in September. In October, prices rose by 53 trim levels; on average, car prices rose from 0.2%, such as the Geely Tugella Flagship, to 8.4%, such as the BAIC X55 Elite LV4.

I should stop there and calm down, but no. It was worth preparing for the worst, according to Ensign Dauerling’s prescriptions: “You’re afraid, coward, of your trunk, but what are you going to do when the heavy artillery starts talking?”

And the heavy artillery in the form of the Central Bank came to the fore and again raised the policy rate in an attempt to stop the fall of the ruble – from 13% to 15%. It is not difficult to guess what such a step will lead to, and in the near future: to an immediate increase in the cost of bank loans. And this problem will directly affect motorists.

Firstly, borrowed money will become more expensive for car sellers – and they have nowhere to go, they urgently need working capital. Any idea who will ultimately pay for this? Secondly, interest rates on private car loans will rise, perhaps even to an unaffordable 23% – 24%.

All the bells are ringing

Alexey Podshchekoldin, Chairman of ROAD, once again sounds the alarm: “Such action on the part of the Central Bank will have a negative impact on the entire market, including car retail. Recently, more than 50% of the new car market and 30-40% of the secondary car market have been sold on credit. The current rate increase will bring an increase in car loan rates, which will reduce sales by 15-20%. This will affect cars of all brands – both foreign and domestic manufacturers. At the same time, a decrease in sales volume will lead to a decrease in the profitability of car retailing, to the threat of closure, and, accordingly, to tax revenues for the state budget. We turned for support to specialized associations defending the country’s entrepreneurial community – the Russian Union of Industrialists and Entrepreneurs, OPORA Russia, the Chamber of Commerce and Industry of the Russian Federation and the Commissioner for the Protection of Entrepreneurs’ Rights in Moscow. We will prepare a joint call.”

Dear Mr. Podshchekoldin, you are absolutely right if you intend to ring all the bells. But those who govern the domestic economy are not interested in your (or ours for that matter) problems. They are confident that they can shift all the financial burden onto the people’s shoulders, and our flexible driver will buy cars at whatever price they charge him.

Unfortunately, they have plenty of reasons for such optimism. Here are the data from the Autostat agency on new car sales in the second half of 2023: July – 95,654 units, August – 109,731 units, September – 110,358 units. Hence the mathematically accurate prediction: no catastrophe is expected in the car market, no matter how some car experts tell us otherwise. We’ll just tighten our belts, but this isn’t the first time.

Source: Avto Vzglyad

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