Experts told what will happen to car prices in 2023

High car prices have become one of the main factors that caused a drop in demand in the Russian market in the last year. Experts interviewed by the AUTOSTAT agency told what pricing strategy automakers will pursue in 2023, given the relatively low consumer demand today, which is largely due to a drop in real incomes of the population. According to Alexey Starikov, Deputy General Director for Sales of New Cars of AVILON AG, the price of new cars will not decrease in the near future, it is expected that traditional price indexation will take place in early 2023, also due to currency fluctuations.

According to Aleksey Podshchekoldin, Chairman of the Board of Directors of BN-Motors, in the context of a shortage, which, due to the departure of most automakers, is about 1 million cars, the average cost of a car by the end of 2022 will be 2.3 million rubles (plus 20 - 25% to 2021). According to the expert, the price of Chinese brand cars will remain at the level of November-December 2022 the next year. As for Russian brands (LADA, GAZ, UAZ), they are likely to rise in price by 10-15%, as they still have problems with the logistics of components and the search of new suppliers. As for cars imported under parallel import, their price will be higher than for similar models previously produced in Russia.

There are no prerequisites for falling prices: no changes in terms of import duties and other relaxations are expected. Stabilization of prices in the Russian car market can be expected if the volume of the car production in the Russian Federation increases to 1.5 million cars per a year (this is the level of 2021). Plus, an additional volume of parallel imports should be about 500 thousand cars. “Currently, the price structure of the market is being transformed. The sharp rise in prices that occurred in March smoothed out by the end of the summer, and since August, the market has seen a stabilization of the weighted average price at a level slightly above 2 million rubles (excluding dealer markups). Moreover, the price fell by about 13% in compare with the period April-May due to the “infusion” into sales of a large share of relatively cheap LADA models. Thus, we are entering 2023 with stable price levels, and if the political and, accordingly, economic situation does not worsen in the future, these levels will remain.

It is quite obvious that there will be no reduction in prices in the new year, and the rise in car prices will occur due to the entry of new brands, models and modifications into the market. We can hope that in the best case, the growth of the weighted average price will not exceed the projected indicator of official inflation - 5.5%," says Viktor Pushkarev, deputy head of the analytics department of the AUTOSTAT agency.