Russian car market plummets
Nhat Linh (TV reporter residing in Russia)–Tuesday, May 17, 2022 12:08 GMT+7
Market car In April, Russia set an unexpected record, when a total of 32.7 thousand new cars were sold. This number is worse than the result of “Black April” 2020, when Russia implemented a federal-wide quarantine regime and closed most of economic activities to combat the COVID-19 epidemic.
More than 30 Japanese, European and American brands specializing in spare parts and consumables have stopped working with Russian auto retailers. According to Russian press, about 70% of service centers across the country are experiencing a shortage of spare parts and components for engines, especially engine oil, in April.
According to experts, the Russian car market in April has dropped nearly 3 times and this is not the limit. (Artwork – Photo: Russia Business Today)
Auto parts on the Russian market have increased in price by an average of 30%, with the biggest increase being parts for Ford, Subaru, Mercedes, and BMW. Many technical centers are currently facing difficulties because of a shortage of spare parts.
The main causes are currency volatility, the inability to transparent pricing, logistical problems, including the lack of containers for sea transport and disruption of normal routes.
Auto dealers expect to make money from what they have, because then there may be nothing to sell. Prices are unlikely to return to 2021 levels, although the market will be reoriented to domestic and Chinese manufacturers.
According to Interfax news agency, Russia’s AvtoVAZ Group has just announced to suspend operations this week, from May 16 to the end of May 20, due to a lack of electronic components. From June, the factory will switch to operating 4 days/week for 3 months.
The group has reached an agreement to supply components from China, but the country’s tightening blockade against the COVID-19 epidemic has affected the plan.
Earlier, the Russian Ministry of Industry and Trade proposed to allocate 55 billion rubles (more than 860 million USD) to support the domestic auto industry and manufacturers of special equipment.
In addition, the government will launch a program to produce universal auto components worth 30 billion rubles ($470 million).
According to experts, the Russian car market in April has dropped nearly 3 times and this is not the limit. By the end of the year, this segment of the economy could shrink by up to 70%. If at least part of production is not restored and imports are not established, cars for the Russians will become a luxury item.
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