The Russian car market has been transformed and dominated by Chinese brands.
In Russia, the de facto withdrawal of European, US and Japanese car manufacturers and others has led to significant changes in the car market. The second-hand car market continues to be buoyant due to the inadequate supply of new cars, albeit not as much as in 2022, when the new car market was less than half of the previous year. Many consumers expect to buy a used car from the outset, as used cars are available in a wider variety of types and foreign-brand cars, which are no longer available in new cars, can be bought. However, this situation is likely to change in the future. Following the US embargo on all passenger cars and the EU embargo on small cars (ICE, electric cars) with a displacement of 1,900 cc or more to Russia, the Japanese Government is also considering expanding the passenger car embargo from the existing luxury cars priced over 6 million yen to ICE cars with a displacement of 1,900 cc or more and all electric cars (HEVs, PHEVs, In 2022, there were 200,000 used cars exported from Japan to Russia, but in the future only some low-displacement vehicles will be able to be exported, which is expected to be a significant decrease.
So, whether the new car market will be able to compensate for the decline in the supply of used cars is far from sufficient, considering that the new car market alone has been 1.8-2 million units so far, although it has started to recover in 2023. The new car market in Russia shrank to less than 900,000 units in 2022, but began to recover in 2023, with the light car market increasing by 9.9% year-on-year to 428,000 units in January-June; in the month of June alone, the recovery speed is increasing by 2.3 times. The reason for this is the rapid increase in imports from China, with imports accounting for 53% of the small car market in the single month of June 2023. In the January-June 2023 period, Chinese brands such as Chery, Haval and Geely followed the leader, Lada. 287,000 cars were exported from China to Russia in the January-May period of 2023, making it the top destination for exports. This is a complete change from the top five in January-June 2021, which were Lada, Kia, Hyundai, Renault and Skoda. And while Lada still accounts for 30% of the market, the growth rates are different, with Lada up 92% year-on-year, while Chery and Haval are up 4.2 and 3.4 times year-on-year, respectively. Furthermore, new car imports from Iran will start over the second half of the year, and the market is sure to become unique in the world in terms of brand composition.