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Arrived: why car production in Russia is waiting for a decline

Almost overnight there was an overcapacity in Russia. That is, there are many car factories, but there is nothing to assemble on them. This came as a surprise even to industry experts and they are still debating whether there is a way out of the impasse. The AvtoVzglyad portal tells how gloomy everything is.

According to statistics, the purchase price of a vehicle increased by an average of 28.7% last year. And the cost of ownership was up 9.3%. At the same time, the real disposable income of the population decreased by 1.4%. The trend talked about by Grigory Miklyukov, representative of the Analytical Center under the Government of the Russian Federation, is disappointing. At the “Intersectoral Automobile Congress” held in Moscow, the expert added that many cities are increasingly encouraging residents to switch to public transport. This is not a whim of the city government, but a global vector for the development of most megacities.

Add to this the increase in the price of spare parts and insurance. As a result, only 7-11% of Russians are ready to buy a new passenger car in 2023. Dreams that they will sell 2,500,000 cars annually in Russia have sunk into oblivion. However, the Ministry of Industry and Commerce stubbornly predicts a frenzied increase in production. The forecast for this year is 470,000 vehicles and in 2027 this number will grow to 1,147,000 units.

Sergey Burgazliev, independent consultant for the automotive and transport industry, has his own opinion. He says that there are not so many functioning production sites left now. Therefore, he believes that in 2023 auto factories will be able to assemble no more than 390,600 cars, and in 2027 – 705,200 units.

Inflation also contributes. Now there are many “iron horses” on the market for 2,500,000 rubles, but those that cost up to 1,500,000 with fire during the day cannot be found. A citizen living in a region where the average salary is 40,000 rubles simply cannot afford new vehicles. But the depreciation of the ruble has just begun.

China and Iran will also take their toll. If the government gives suppliers tax incentives, they will flood us with cheap foreign cars. A number of experts are already confident that the share of Asian brands will reach 60%. All this will put pressure on domestic producers. Especially if they cannot boast of serious localization of production. The price depends on it. In general, the car becomes a luxury again and the bus becomes a means of transport.

Photo: AvtoVzglyad

According to statistics, the purchase price of a vehicle increased by an average of 28.7% last year. And the cost of ownership was up 9.3%. At the same time, the real disposable income of the population decreased by 1.4%. The trend talked about by Grigory Miklyukov, representative of the Analytical Center under the Government of the Russian Federation, is disappointing. At the “Intersectoral Automobile Congress” held in Moscow, the expert added that many cities are increasingly encouraging residents to switch to public transport. This is not a whim of the city government, but a global vector for the development of most megacities.

Add to this the increase in the price of spare parts and insurance. As a result, only 7-11% of Russians are ready to buy a new passenger car in 2023. Dreams that they will sell 2,500,000 cars annually in Russia have sunk into oblivion. However, the Ministry of Industry and Commerce stubbornly predicts a frenzied increase in production. The forecast for this year is 470,000 vehicles and in 2027 this number will grow to 1,147,000 units.

Sergey Burgazliev, independent consultant for the automotive and transport industry, has his own opinion. He says that there are not so many functioning production sites left now. Therefore, he believes that in 2023 auto factories will be able to assemble no more than 390,600 cars, and in 2027 – 705,200 units.

Inflation also contributes. Now there are many “iron horses” on the market for 2,500,000 rubles, but those that cost up to 1,500,000 with fire during the day cannot be found. A citizen living in a region where the average salary is 40,000 rubles simply cannot afford new vehicles. But the depreciation of the ruble has just begun.

China and Iran will also take their toll. If the government gives suppliers tax incentives, they will flood us with cheap foreign cars. A number of experts are already confident that the share of Asian brands will reach 60%. All this will put pressure on domestic producers. Especially if they cannot boast of serious localization of production. The price depends on it. In general, the car becomes a luxury again and the bus becomes a means of transport.

Source: Avto Vzglyad

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