We offer to your attention the first issue of the omnibus study based on the opinion of ca...12 january more info
Data were presented by 55 holdings.
I would like to describe the situation, in which the Russian car market is now. To do this we’ll move forward in the history.
Our car market is approximately 20 years old. The first statistic on the mass import of foreign cars in our country dated back to 1992-1993. Schemes were quite different than it is now, nevertheless, the boundaries were opened and the flow of new and used cars went to our country. AvtoVAZ, GAZ, Moskvich and UAZ didn’t remain on the side line. They moved to market system from a distribution one – brokers, stock exchanges, off sets and so on. It created the forming of new business – automobile one.
In my opinion, these 20 years could be divided into 4 stages.
The first stage (1993-1998) is the stage of initial market forming. The first independent dealers appeared at that time. Services started to “get out” of garages “in the light”. Spare part markets, first car shops took orders for spare parts. Private car-deliverers were ready to deliver a 5-10 year foreign car from Germany or Poland, which will be “better than a new one”. The reality of time is the “crushed stone areas” in the whole country. Prices for cars changed almost every day. The result of 1997: it was imported over 500,000 used foreign cars and official dealers sold about 70,000 new cars. In addition, Russian car plants sold over 900,000 vehicles in the domestic market. 1,500,000 units were sold totally. Then there was a default.
The second stage (1998-2002) I would call the post-crisis bottom. At that time many foreigners that came to us and were shocked by the crisis stopped temporarily their operations. Those foreigners that didn’t get but were going to – changed their plans. The main task was the survival. And only “the most separate companies” continued to build a business here. In 1999 the summary market decreased to 1,000,000 cars. And only 46,000 new foreign cars were sold through the official dealerships. And about 100,000 used cars were imported. But this period was the “lifeline” for Russian enterprises, especially for AvtoVAZ. The currency was expensive; prices for domestic cars were 3-4 times lower than prices for foreign cars of average class. Competition weakened sharply.
The third stage (2003-2008) can be described as “foreign car boom”. Annual sales growth rates of new foreign cars were expressed by double digit and even by triple-digit. As a result, sales volume of foreign cars grew almost 10 times for five years – from 216,000 cars in 2003 to over 2,000,000 cars in 2008. Dealer networks were formed rapidly in parallel. One after another began to run assembly plants. Dealers began to turn into powerful holdings from disparate centres. Growth, growth, growth ... And everything would be nice if the next crisis didn’t come.
The fourth stage (2009-2012) I call the post-crisis market recovery. Three years ago it seemed that everything was bad and we would get out of this hole at least five years. But everything flows, everything changes and market recovery rates were higher than it was expected. And now we have a new record – almost 3,000,000 new vehicles, though with account of light commercial vehicles. Dealers worked again by “catching up” the market all three years.
But there come the new fifth stage (2013 - ...), stage of stabilization, stagnation or how can else we call this stage? We didn’t work in these conditions yet. Before we “chased” the market or we “fell” together and survived and “chased” again forward. And now, according to the general opinion, the market capacity matches the state of economy. The next crisis was postponed. What are the special features of this stage? Will it be a significant increase in a competition? Or “price wars”? Or something else? I propose to discuss it in a new place – the group “Russian car market” in the professional social network LinkedIn. I invite all, who are interested!