Cars started up: sales of new cars increased by a third in a month

Last month was a record for new car sales since the beginning of the year. Compared to June, they have increased by almost a third. In addition, for the first time in a long time, the leader among foreign car brands has changed. However, despite the positive trends, experts and dealers are still cautious in their forecasts for the near future. The details are in the Izvestia article.

The way up

By the end of July, 120,649 new passenger cars were sold in Russia. Such data is provided by the analytical agency Autostat, based on the number of issued EPTS. This is the best result since the beginning of the year, and sales increased by 34% compared to June. However, the figures are 11.4% lower than in July last year.

Overall, despite a decent increase in new car sales last month, the overall situation in the automotive market remains quite difficult. From January to July inclusive, a total of 651,029 new passenger cars were sold in Russia, which is 23.9% less than in the same period last year.

AvtoVAZ remains the market leader: the Lada brand accounted for 23.4% of cars sold in July (28,240). The most popular foreign brand last month was Chery, whose models sold 13,502 units. Haval, which had been in second place for a long time, dropped to third place (13,117), followed by Geely and Changan with 8,389 and 7860 cars, respectively. The sixth place was taken by the Belarusian brand Belgee with an indicator of 6511 cars. Jetour (4410), Solaris (3326), GAC (2842) and Omoda (2765) brands also entered the top 10 last month.

Six of the ten leading brands showed negative dynamics in July. Omoda sank the most (-47.8%), while Chery was the least critical (-5.1%). Belgee stood out among the brands that showed growth (+75.2%), while Jetour had the least sales growth (+24.6%).

In the "personal standings", Lada Granta family cars still hold the first place - 13,030 units, followed by Lada Vesta, with a score of 6,673 cars. The best-selling foreign car in July was the Chinese Haval Jolion crossover (third place with a score of 5,552 cars). Behind him is Chery Tiggo 4 (4482). The top 5 includes the Belarusian crossover Belgee X50 with a score of 4,249 cars. Changan Uni-S ranks sixth (3784), followed by Chery Tiggo 7L (3644) and Geely Monjaro (3340). Completing the top ten most popular models in July are the "classic" Lada Niva (2936) and Jetour Dashing (2831).

Glimpses of positivity

The sharp increase in sales in July compared to June and the record results of last month were the result of a combination of several factors, said Sergey Tselikov, CEO of Autostat.

— The so-called "waiting people" have realized that it is no longer worth counting on the rapid return of global automotive brands to our market. Significant discounts on cars, as well as very attractive loan rate subsidy programs offered by automakers, also played a role in customer sentiment. The Central Bank's decision to lower the key interest rate also contributed, which made deposits less profitable than they were a month ago. If at the beginning of the year there was a situation of a "perfect storm" in the market, which led to a drop in sales, now the combination of all these factors has led to a "perfect calm", which has contributed to the fact that car sales have noticeably increased over the past few weeks, — said Sergey Tselikov.

Renat Tyukteev, Deputy General Director for New Car Sales at Avilon AG, also believes that several factors contributed to the sharp increase in new car sales in July.

— The main one is the reduction of the Central Bank's key rate, which led to the prolongation of deposits on less favorable terms for depositors. As a result, people who were delaying buying a car, making money at high rates, began withdrawing money from banks. Another reason is currency fluctuations in the second half of July, which pushed individuals to buy a car as soon as possible," he told Izvestia.

Renat Tyukteev cites the changed expectations of potential buyers as the third reason, which has nothing to do with changes in the market. Most people have gradually come to the conclusion that the return of European, American, Korean or Japanese brands is not worth waiting for in the foreseeable future, which means it is pointless to postpone the purchase of Chinese and Russian cars, he noted.

Should we expect further growth

The record July results came as a surprise to some experts, as they predicted that a gradual increase in car sales would begin later.

— I am somewhat surprised by the July results: in my opinion, the positive dynamics in the market should have started in the fall. This is certainly a positive trend," admitted Maxim Kadakov, editor—in-chief of Za Rulem magazine.

In his opinion, significant growth is unlikely to be expected in the future. If current conditions continue, the results of the following months will be approximately at the level of 110-120 thousand cars, he believes. Thus, according to Maxim Kadakov's forecast, no more than 1.2-1.25 million cars will be sold by the end of the year.

Sales growth has been observed for only three weeks, so it is premature to say that the market situation has stabilized, Renat Tyukteev believes. However, all the prerequisites for this and the gradual growth of the market are already in place, he believes.

Even despite the July sales growth, the overall situation in the new car market is still difficult, says Igor Morzharetto, partner at the Autostat analytical agency. In his opinion, it is impossible to talk about any stable positive trends in the market based only on good sales results last month.

— The current surge cannot cover the decline that we have seen throughout the first half of the year. Even if the further results of each month are close to the July figures, by the end of the year the market will not even reach last year's figure. Most likely, the result will be lower, at the level of 1.1—1.2 million cars sold," predicts Igor Morzharetto.

Current data does not give grounds to assert that the market has reached stability, according to Irina Frank, CEO of Frank Auto. A significant drop of almost a quarter (-23.9%) in seven months and a continued decline in July compared to July last year indicate a steady negative trend in the market, she believes.

— However, it is impossible not to note the striking exceptions when individual brands demonstrate explosive growth. This indicates a deep restructuring of the market: Chinese and Belarusian manufacturers are actively increasing their presence, replacing outgoing players and changing the competitive landscape. Although the overall market is likely to continue to experience pressure in the near future, we can expect further strengthening of positions and sales growth among the most successful new leaders," Irina Frank told Izvestia.