Old age is not a joy: what will the new recycling rates lead to?
Most of the used cars sold in Russia are older than 10 years. Over the past five years, the average age of passenger cars in the Russian fleet has increased by two years. The introduction of new rules for calculating recycling will lead to even greater aging and even dilapidation of the fleet of cars, experts believe. Details can be found in the Izvestia article.
"Only old men go into battle"
According to the results of eight months, 3.867 million used cars were sold in Russia, according to the analytical agency Autostat. At the same time, according to Sergey Tselikov, the general director of the agency, more than 70% of sales are accounted for by models older than 10 years — approximately 2.74 million cars. According to the expert, from January to August inclusive, 932,765 cars aged 11 to 15 years (24.1%) were sold in our country, 902,416 — aged 15-20 years (23.3%) and 904,637 — over 20 years (23.4%).
— The main problem of the secondary market is that there are fewer and fewer fresh cars every year, — says Sergey Tselikov.
In terms of total sales among used cars, Lada cars are the leaders, accounting for more than a quarter (992,525 units) of all used cars sold since the beginning of the year. At the same time, of the five AVTOVAZ models included in the top ten most popular cars on the secondary market, three have already been discontinued. In particular, the production of Lada 2107 (the best—selling used car – 94.2 thousand cars purchased in January-August) was discontinued in the spring of 2012, the "freshest" copies on the market are 13 years old. Production of Lada 2114 (fifth place, 75.4 thousand cars) was discontinued at the end of 2013, and it has been on the secondary market for at least 12 years. The youngest Priore (seventh place, 67.1 thousand cars) of those currently sold with mileage is at least seven years old — the last car rolled off the assembly line in the summer of 2018.
Against this background, Autostat analysts note a serious aging of the fleet. If in the middle of 2020 the average age of a passenger car in our country was 13.6 years, then as of the beginning of this year it has increased to 15.5 years. Thus, in five years, the passenger car fleet in Russia has "aged" by almost two years.
"Scrap" as a catalyst for aging
Nikita Kolesnikov, a representative of the Japanese export company HSS in the Russian Federation, believes that the increase in the average age of cars on the secondary market will continue in the foreseeable future. In his opinion, the new rules for calculating the recycling fee will be "a powerful catalyst for this alarming trend."
— The increase in recycling from November 1 will put an end to the availability of modern used cars. A potential buyer who was considering a relatively recent three- to five-year-old foreign car will face the fact that its price will skyrocket due to the new fee. This will force the vast majority of consumers to reorient themselves to the segment that is not affected by the increase — to older cars that are already in the country. Simply put, most people will have no choice but to buy old cars," he said.
According to the expert's forecasts, demand is expected to increase in the near future, and as a result, prices for used cars that were imported and cleared before November 1, 2025, when new recycling regulations are expected to be introduced.
— These machines, especially powerful and relatively fresh ones, will instantly turn into a scarce commodity and become an object for resale at a significant margin. On the other hand, the segment of used cars that are yet to be imported will be virtually eliminated for models with more than 160 hp. This will lead to a final skew of the market towards the oldest and most accessible categories. The fleet will not just age, it will deteriorate, as the influx of more modern and safer cars will dry up, Nikita Kolesnikov told Izvestia.
The new recycling calculation method will not have a significant impact on models older than ten years, says Roman Klyauzov, director of the Avilon Group's Used Car Procurement Department. The main impact will affect three- to five-year-old cars of the medium and premium price segment, which now make up the bulk of imports by individuals, he notes.
— Popular models of premium German brands will not disappear from the Russian market, although import volumes will decrease significantly. The share of resellers specializing in such supplies is likely to decrease. But we, as dealers who buy cars already on the Russian market, will feel this only in a year or two, when the owners start reselling these cars," Roman Klyauzov predicts.
Even older
The proposed change in the order of calculation of the recycling fee may lead to the appearance on the market of very "age-related" models, the so-called "youngtimers," says Anton Shaparin, vice president of the National Automobile Union (NAS). This will lead to an even more significant increase in the average age of the Russian car fleet, he notes.
— According to the law "On Production and Consumption Waste", car models that have been released for 30 years — until 1995 - are exempt from paying the recycling fee, subject to certain conditions. There are quite a lot of such cars in good condition both in Europe and in the USA. Moreover, despite their age, they are equipped with several airbags, climate control, and a "classic" automatic. Instead of annoying displays for many car owners, there are traditional buttons and switches. I would venture to assume that a certain part of potential buyers will prefer just such a model," NAS vice president told Izvestia.
According to Anton Shaparin, the schemes for the supply of cars from unfriendly countries through other states "have long been worked out."
Theoretically, such a scenario is not excluded, but in practice it is unlikely, says Maxim Kadakov, editor-in-chief of Za Rulem.
— It's one thing to import such a car, and another thing is to maintain it. Maintenance, repair, and spare parts for such models are difficult to call affordable. I doubt that European or American yangtimers will appear en masse on Russian roads," he told Izvestia.
You're recycling!
Anton Shaparin calls the resumption of the state program for recycling old cars one of the ways to reduce the average age of cars in Russia and upgrade the fleet. The scheme in force a few years ago, in which the owner of an "aged" car, who handed it over for recycling, received a subsidy for the purchase of a new model of domestic production, has proved its effectiveness.
"A lot of outright junk has disappeared from the yards, the aging of the fleet has slowed down, and Russian car factories have received additional demand for their products," he recalls the results of the previous state recycling program.
The effect of such a program, if it is resumed, will greatly depend on the amount of subsidies offered for the purchase of a new car instead of a recycled one, Maxim Kadakov believes. In his opinion, it should be a "really significant bonus."
— Even if it's 250-300 thousand. rubles, which is unlikely in principle, it will not have a significant effect. After all, the most affordable domestic model, Lada Granta, now costs about 1 million rubles. But if a person does not have a million, then, most likely, he does not have 700-750 thousand rubles missing before buying this model after receiving a conditional certificate for the disposal of an old car. And if his old car is still on the move, and in more or less decent condition, then it is likely that it will be more profitable to simply sell it for a conditional "recycling" 250-300 thousand rubles, and add some more money to buy another used car, but "fresher," Maxim Kadakov believes.
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