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.
Sergei Tselikov, the CEO of the analytical agency AUTOSTAT made a presentation at the Forum “Auto evolution 2013”. Review of the report was published on the website of the newspaper “Vedomosti” on October 24th 2013, Annex “Forum”:
I have two news for you, colleagues, good news and bad. Let's start with the good one: the Russian car market was the first in Europe in August.
The maximum sales were in June of the last year: it was sold about 260,000 new passenger cars, plus a small number of commercial light vehicles, [the sum] about 270 000-275 000 units. The gradual decline began since that moment. There are many reasons for it, they are complex, but the main thing is that our growth has been associated with a recovery from the crisis, we have recovered, but we didn’t have some significant drivers for growth in our economy. Now we have reached the level of 220 000-230 000 passenger cars and 15,000 commercial vehicles per month. And this level is expected in the foreseeable future - taking into account seasonality.
It was sold nearly 1.5 million vehicles for seven months. “AvtoVAZ” continues to lead the TOP, its share decreased slightly, but the leadership is maintained. Many brands become closer to it. Retaining this trend, we have about 2.6 million vehicles at the end of the year that is 5 % compared to the last year. In principle, the volume is large enough, but at the same time, many experts were hoping for further growth, made plans, received loans, evolved - and now we have problems.
Trend is quite clear - the share of Chinese brands in the Russian market increases from year to year. In principle, the premium segment grows well. The premium segment consists of people that are more or less rich, they are less susceptible, on the one hand, to economic issues, on the other hand, they are more likely to change cars: the person who has the money wants to update the car in 2-3 years. Poorer people change their cars not often and this is also a factor that the low-cost segment crouches slightly.
If you look at the segmentation of the market, you can see the trend that people started to buy compact crossovers, which can be called pseudo SUVs. It is front-wheel drive very often, it is a class between B and C very often, so, the car is just higher - our roads, apparently, were made for such vehicles. Although roads are built actively, but they will look like the European, even remotely similar, probably, not very soon. It is now about 35 % of the cars in this segment, and it is growing quarter on quarter. It is possible that this segment will be 40% and maybe even 50%. It all depends on what we have kind of road curbs, sidewalks, because they need somewhere to park. Filling of this segment is due to Class C, a little bit class B, and other classes too. This trend is also in the luxury, premium segment - premium crossovers.
The shift is towards more expensive vehicles. It moves not because the consumer wants, but because it is happening in the market. First, the segment from $ 25,000 to $ 35,000 - it is just a segment SUV, and there are almost no cheap SUVs that cost less than RUB 750 000. Only Renault Duster is cheaper and it has such demand that it has entered in the Top-5 of all vehicles in general – it has really torn the market. And people continue to be recorded at the queue, and they are willing to buy, and buy, and buy. A little more high segment is growing slightly, but the segment that is less than $15,000, that is, below RUB 450 000-500 000, is declining gradually. In principle, it is less favorable to sell these vehicles as for manufacturer, so for dealers: they have a smaller margin and this segment is gradually washed out of the market. The market structure is close to the European parameters: the average price reached $ 28,000 that is close to the markets of European countries.
There is such a key indicator as provision of cars, analysts and manufacturers referred to it very often: provision of cars is very low in Russia that is why the Russian market is waiting for a constant growth. I believe that this is not the case. Even in the current market - 2.5-3 million vehicles - we add somewhere +8-10 cars per 1000 inhabitants each year. So, the figure is now - 260 cars, even if the market will be at these rates then we will reach, in principle, the level of Eastern Europe in 10-15 years, and later even the level of Western Europe, we will have 400-500 cars for 1000 residents. Transport infrastructure is not ready for this, especially in Moscow and St. Petersburg. I understand that people think what to do with it, they try to do something, but still we have more problems than solutions.
Cars that are registered in the Traffic Police: one half consists of domestic brands and another half - the brands that came to us for the last 10-15 years. The share of foreign cars is increasing constantly from year to year; the share of Russian ones is reducing. The structure of the share of foreign cars is very similar to the European: average age of them is nine years old, the same is in Germany and France. After a few years, the structure of the parc will be also very, very similar to the European one. But the average age is still around 12 years old, of course, a bit older, and we would like to see actions of the state to encourage the parc renovation. There are people that have cars of high environmental class and the good-quality vehicles in the big cities, but if we go to regions then we see that there are still many old cars that would like to take off as quickly as possible and dispose of.
Plans of manufacturers are higher than the actual needs of the market. We have calculated recently the claimed power in the territory of Russia, which manufacturers have built or they are about to be opened – it was 3.2 million passenger cars. The entire market is less than 3 million units, and there is a certain segment of the market, which will be still imported; now imports have a third of the market, perhaps, it will be 25%. But 75 % of the market - it's a little bit more than two million vehicles. It turns out, that the load of capacity is around 60-70 %. And these facilities will be idle without some fundamental changes. In fact, it’s such a trap for the producers.
This year, we expect the decline of production by 2-3%. We drove here [along the plant Volkswagen], and you probably also went and saw how much products they have at the warehouse: a lot of it. Commodity stocks have started to increase in the last year, this year they continue to grow. Imports will fall more, the production - a little less, but stocks will grow in the warehouses for this year. The manufacturers and dealers have to think about it very, very seriously.
We have formed three automobile industry zones: in the center of Russia - Kaluga and Moscow, St. Petersburg and the surrounding area, plus the Volga region. Over 100 foreign suppliers came there for over the last 10-15 years. The central area is developed very actively. About 50 % of car production is concentrated in Volga region, there are also growing industrial parks, there are special economic zones, there are also formed clusters ... But Kaluga region is a leader in how and what to do. And it is necessary to go here actually, to learn, to learn from the experience and try to compete, it will be only better in terms of the competition.
The first point is that the Russian market at the moment is formed. Its structure is clear, dealer network is sufficient for the present volume, service and production - as well. Further changes in the market are already possible through competition; it will be not forming but re-forming of it.
The second point is that the client has changed dramatically for the last years. There is a lot of the automotive press, the tremendous opportunities on the Internet to obtain information and so on, that is, the client is not the same. His requirements are higher and higher. It is more and more difficult to work with this client.
Well, we can resume that the competition is growing and it will continue to grow.