Auto substitution: Chinese automakers are losing the Russian market
November sales of new cars for the first time showed a positive result compared to last year's figures. At the same time, the number of cars sold decreased compared to the previous month. At the same time, Chinese car brands have significantly reduced their share in the Russian car market. Details can be found in the Izvestia article.
A little higher
According to the results of November, 127,921 passenger cars were sold in Russia, which is 5% more than in November last year. Such data is provided by the analytical agency Autostat, based on the number of issued EPTS. Last month, for the first time this year, the car market showed a positive result compared to last year's figures. At the same time, compared to October, which became a record this year, the number of cars sold decreased by 18%. Thus, after the growth that began in the middle of summer, the car market began to decline again, Autostat analysts say. In total, from January to November inclusive, almost 1.19 million new cars were sold in our country, which is 17.8% worse than the results for 11 months of last year.
The structure of the automotive market in our country has changed significantly over the year, says Sergey Tselikov, General Director of Autostat. Thus, the share of Chinese car brands in November was 44.6%, while a year ago they occupied 54.2% of the market. Russian brands remained at about the same level — 35.6% now versus 36.3% a year earlier, he noted.
Other information was announced at a recent meeting with journalists by the head of the Ministry of Industry and Trade Anton Alikhanov. He noted that in the first ten months of this year, the share of Russian brands (including trucks and buses) in the market was about 55% — more than half of all cars sold. In the same period last year, domestic models occupied about 44% of the market, the minister noted.
At the same time, according to Autostat, there are significant developments within the domestic car segment. Thus, AVTOVAZ's share decreased by almost 10% over the year (21.43% of the market now instead of 31.06% last November). Some Lada car buyers have been "pinched" by new Russian brands such as Solaris and Tenet. Belarusians also increased their share in the Russian market from 2.6% to 6.5% over the year. And global car brands supplied to our country through alternative channels have almost doubled their share compared to last November, from 6.9% to 13.2%, said Sergey Tselikov.
Leaders and outsiders
For a long time, AvtoVAZ has retained the title of the leader of the Russian automotive market, even despite a significant decrease in its share in November. Lada cars sold 27,416 units last month. Haval turned out to be the most popular among foreign brands again, with 17,961 cars.
The main surprise of November was the results of the Russian brand Tenet, which, with a circulation of 9,914 cars sold, managed to take the third place, ahead of brands such as Geely and Belgee (9672 and 8326 cars, fourth and fifth place, respectively). Changan took the sixth place (4,846 cars), the seventh place went to the Solaris brand (4,113 units), the eighth to the Toyota brand (3,970 cars — all delivered to our country through alternative channels). Completing the top ten are Chery (3160 cars), which was in sixth position last month and was one of the top three market leaders at the beginning of the year, and Jetour (2225 cars).
Lada Granta retained the title of the bestseller of the Russian car market in November with a result of 12,997 cars sold. Haval Jolion (6258 units), assembled in the Tula region, is on the second line, Vesta has 5386 cars in the third position. This is followed by crossovers produced at the former VW plant near Kaluga of the new Russian brand Tenet (T4 — 4535 units, and T7 — 4485 cars). The second five included Geely Monjaro (4,121 cars, imported from China), Haval M6 (3,660 cars, assembled in the Kaluga region), Belarusian Belgee X70 and X50 (3,578 and 3,459 cars), as well as Lada Niva Legend (3,039 units).
Thus, of the ten most popular cars in our country, only one model is directly imported from China, the remaining nine are produced either at Russian car factories or supplied to us from Belarus.
Market Transformation
As noted during the online conference "Autostat. Operational information", Sergey Udalov, executive director of the agency, said that after the majority of foreign automakers left our market in 2022-2023, the share of Russian models in the structure of the car market was approximately 15%. Now the situation is changing in the opposite direction. Cars that were previously imported into our country are now being replaced by locally assembled models, including due to the emergence of new domestic car brands, he said. At the same time, in November, as in October, a large volume of new car imports was recorded, according to Autostat. Last month, 16.8 thousand cars crossed the Russian border, which is almost twice as much as in November last year.
— The growth in the volume of machines supplied by parallel imports is primarily due to the introduction of new rules for calculating recycling rates from December 1. Importers, primarily individuals, tried to manage to import cars before this date," explained Sergey Udalov.
The active replacement of imported models with similar ones indicates significant changes in the automotive market and its transformation, says Maxim Kadakov, editor-in-chief of Za Rulem magazine.
— For example, the Chery brand has "blown away" so much that it is likely to drop out of the top ten soon. This will happen after dealers sell their remaining Tiggo 4, Tiggo 7 and Tiggo 8, which are now produced in Kaluga under the Tenet brand, as well as after the start of production of the Tenet T9 model at this plant next year, he believes.
The new reality
Irina Frank, CEO of Frank Auto, believes that the current process in the Russian car market is not a classic import substitution, but rather an active reformatting of supply chains and the creation of new market brands. Now a new ecosystem is emerging, where localized assembly of cars, built mainly on Chinese platforms, but designed as independent projects from the legal and marketing sides, plays a key role, she noted.
— The Tenet, Belgee and Solaris brands are demonstrating a phenomenal rate of adaptation, filling the niches vacated by declining sales of traditional leaders like Lada and some "old" Chinese players. Thus, the share of direct imports of finished cars may indeed decrease, but its place will be taken by the import of components and technological platforms with subsequent assembly in Russia and the EAEU countries. This is the new reality of the market," says Irina Frank.
At the same time, the prospect of the final withdrawal of large Chinese brands from the Russian market next year is extremely unlikely, the expert believes. In her opinion, companies from China are likely to have a strategic division of roles and parallel development of several business models.
— On the one hand, such powerful players as Haval or Geely maintain their positions thanks to a well-developed dealer network, recognition and full-fledged model ranges. On the other hand, these same manufacturers can be technological "donors" for new local brands. As a result, the market will be segmented: the original Chinese brands will remain in the premium and mid-range segments, while new brands like Tenet and Belgee will occupy the mass price segment," Irina Frank predicts.
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