Zhduny brought down the car market: sales of new cars fell by a quarter

Car sales in February showed the worst result in the last two years. According to experts and dealers, expensive car loans, high deposit rates in banks, as well as rumors about the possible return of a number of departed car brands to Russia contributed to the decline in demand for cars. Experts believe that positive trends in the new car market should be expected no earlier than the second half of the year. Details can be found in the Izvestia article.

A steep dive

Last month, 78,040 new passenger cars were sold in Russia, which is 24.9% less than in February 2024. This is reported by the analytical agency Autostat, based on the number of issued EPTS. The figures for the last winter month were the worst since March 2023, while for the first time since April of the year before last, the car market showed negative dynamics, the agency noted.

— When we received these results, at first we did not believe the figures, deciding that there was some kind of error in the calculations. We double—checked everything once again and came to the conclusion that, unfortunately, there is no mistake," Sergey Tselikov, the agency's general director, said during the Autostat Operational online broadcast.

Another unpleasant surprise in February was the negative dynamics of new car sales compared to January, said Sergey Udalov, Executive Director of Autostat. According to him, in the ratio of February to January, car sales decreased by 12%. At the same time, according to long-term observations, February usually showed a "plus" compared to the first month of the year, he stressed.

— January, with long New Year holidays, has always demonstrated low sales volumes. February, although also not a breakthrough month, was still better in terms of the number of cars sold. This year was an exception," he contrasted.

Autostat cites two key factors that led to a sharp reduction in the number of cars sold in February. One of them, according to Sergey Tselikov, is a high key rate. First, it makes car loans too "expensive." As a result, according to the agency, in February, the number of loans issued for the purchase of a new car decreased by 31% in quantitative terms, and by 46% in monetary terms.

— In addition to the "high cost" of car loans, the high key rate makes deposits more attractive. It also does not contribute to the demand for cars: people prefer to keep money in banks at high interest rates rather than spend it on buying a car," he said.

The expert considers the information background associated with the possible return of departed car brands to our country to be the second reason for the peak in the car market.

— Thus, a kind of "waiting list" appeared on the market. Some are waiting until the key rate drops, while others are counting on the return of "familiar" car brands. Both expectations have a negative impact on the market itself," said Sergey Tselikov.

They went into negative territory

AvtoVAZ retained its leadership in the car market in February, selling 24,573 Lada cars (-14.3% compared to last February). It is noteworthy that over the past month, no other automaker has surpassed the 10,000 mark. Thus, Haval, which is in second place, immediately worsened its performance by 20.1%, selling only 9570 cars. Chery holds the third position (8,389 units, -15.5%), Geely holds the fourth position (5,101 units, -58.4% at once).

This is followed by Changan with a result of 4,424 cars sold (-26.2%) and Omoda, which sold 2040 cars in February (-34.7%). Sales increased compared to February last year (primarily on a "low base") for the brands Belgee (seventh place, 2001 cars, +92%), Jetour (eighth position, 1,770 units, +22.5%), and Japan (ninth place, 1,627 cars, +39.8%). The Exeed brand closes the top 10, with 1,442 vehicles sold (-57.8%).

Lada Granta remained the leader in the "personal standings" — 9513 cars, which is 27.2% less than a year ago. It is followed by Lada Vesta, whose sales increased by 14% in February, to 8,169 units. The Chinese Haval Jolion crossover retained the title of the most popular foreign car (3,770 copies), but due to the fact that at the beginning of the year this model "flew out" of the state program of preferential car loans, its sales collapsed by a quarter compared to last February.

This is followed by the Chery Tiggo 7 Pro Max (3,652 units, -2.9%), followed by two "Fields": Travel (2,771 cars, -33.6%) and Legend (2,095 units, -49.4%). Also among the top ten bestsellers were Chery Tiggo 4 Pro (2,086 units, -24.6%), Changan Uni-S/CS55 Plus (2,075, -0.5%). The ninth place belongs to Lada Largus, which, with a result in 1971, reached the top ten for the first time after the resumption of production last year. Geely Monjaro closes the top 10 (1912 cars, -60.4%).

"Cementing" the market

According to Renat Tyukteev, Deputy General Director for New Car Sales at Avilon AG, one of the reasons for the February drop in sales is the expectation of lower car prices from buyers against the background of the depreciation of the euro and the dollar against the ruble. However, it is not worth counting on the fact that cars will become cheaper because of this, he is convinced.

"This will definitely not happen due to the fact that the increase in the recycling rate has been worked out in purchase prices from distributors by only half," he told Izvestia.

Another reason for the drop in demand, according to Tyukteev, is a series of political news, on the basis of which customers draw conclusions about the partial or complete return of a number of automakers to our market. At the same time, buyers expect a return to prices at the level of 2022, he notes.

— These assumptions and expectations are even more erroneous and have a negligible probability. Recycling has increased many times, the euro exchange rate was a quarter lower in 2022, a number of car manufacturers that left us, which in the past had car assembly lines in our country, lost their subsidies from the state, there are no joint ventures," Renat Tyukteev emphasized.

In his opinion, all this suggests that the current pause in car purchases, as well as customer sentiment and expectations, are not supported by economic conditions. The high key interest rate, which freezes loans, is also not encouraging. All these factors together "cement" the interest in buying a car, says the Deputy General Director for new car sales at Avilon AG.

We'll live to see the summer

According to Autostat, in February, the share of cars produced in 2025 accounted for only 8% of cars sold. At the same time, 88% are 2024 models, and the remaining 4% are cars manufactured back in 2023. The stock of cars in the warehouses will last at least until the summer, Sergei Tselikov believes. Against the background of overstocking, manufacturers have already changed their plans to import new cars to our country: in February, imports of used cars fell by 73%, said Sergey Udalov.

The timing of a further decline depends on the market's ability to adapt to new conditions, according to Irina Frank, CEO of Frank Auto. Domestic and Chinese brands are actively replacing departed competitors, but their growth does not compensate for the general decline, she notes. In her opinion, sales growth should not be expected in the coming months, but a correction is possible by the end of the year.

— If the macroeconomic situation does not improve, but inflation and credit availability remain, the decline may last until mid-2025. However, it is important to take into account that the market is gradually rebuilding: local production is expanding, and the share of the Lada brand and Chinese brands is growing, which creates the basis for stabilization, Irina Frank told Izvestia.

At best, the market growth can only be observed closer to the second half of the year, according to Maxim Kadakov, editor-in-chief of Za Rulem magazine. Up to this point, car sales in the "month of this year, by the month of last year" state will only decrease, he believes.

— Obviously, the market is not saturated yet, and the aging of the fleet remains a big problem. Just in order to keep the average age of a car in Russia at the current level, at least 2 million new cars must be sold per year, so that the average age decreases, an increase of 2.3—2.5 million new cars is needed annually. The potential demand for new cars is enormous, but economic and geopolitical factors and expectations are still preventing buyers from realizing it," Maxim Kadakov believes.