China’s expansion and AvtoVAZ’s leadership: end of year for Tatarstan’s car market
Russian buyers in 2024 continued to rely on cars from China leaving behind their usual preferences for German, Japanese and Korean brands. As experts note, many bought cars, trying to “jump on the last wagon” and do it before the introduction of the recycling fee. At the same time, Tatarstan residents actively bought cars even in the luxury segment. With the development of the necessary infrastructure in Kazan, the popularity of electric cars has also increased. Read more about these and other industry trends and the forecast for 2025 in a report of Realnoe Vremya.
Car sales have grown by half
The passenger car market in the republic has grown significantly over the year. Over the 11 months of 2024, 70,500 cars were sold — this is 60% more than in the same period of 2023, Avtostat told Realnoe Vremya. Chinese brands are confidently in the lead, occupying 8 out of 10 positions in the ranking of the most popular models. However, AvtoVAZ remains the sales leader: Lada Granta is almost three times ahead of its closest competitor, Haval. Interestingly, the Korean Hyundai remains in this ranking, although its sales have declined. Even the resumption of production at the former St Petersburg plant, which became the property of ART-Finance company from Russia, did not help. Now, models previously produced under the Hyundai and Kia brands are produced under the Solaris brand (Solaris HS and Solaris KRS are the former Hyundai Solaris and Kia Rio, respectively, Solaris KRX is Kia Rio X, and Solaris HC is Hyundai Creta). Externally, the changes are minimal (change of nameplates), but the vehicle trim levels have been revised.
The most impressive growth was shown by the Chinese brand Belgee, whose sales increased 94 times, or 9280%. Jetour, Changan and Geely also demonstrated significant growth. Sales of Haval, already a fairly popular brand in Russia and Tatarstan, doubled.
The top ten most popular models included four Lada models (Granta, Vesta, Niva Legend and Travel), while the remaining positions were occupied by Chinese cars. Lada Granta remains a bestseller, and Lada Vesta sales are half as much as the leader.
Sales of luxury cars soared in Tatarstan
The Russian luxury car market grew by 22% in 11 months of 2024, reaching 499 units sold. Positive dynamics have been observed for the fifth month in a row, and in November, the most popular brand was Rolls-Royce with 19 cars sold.
In Tatarstan, sales increased by 180% — from 5 to 18 cars in 11 months. The Bentley brand became the sales leader in the region, and the most popular model was the Bentley Bentayga.
In the ranking of the most purchased models, Bentley Bentayga and Lamborghini Urus became the most popular among Tatarstan residents.
In 2025, Lada e-Largus will appear at dealers
For 11 months of 2024, sales of new electric vehicles in Russia increased by 34% compared to the same period last year, reaching 16,300 units.
In Tatarstan, 423 electric vehicles were sold during this period, which is slightly less than for the same period in 2023. The most popular brands were Zeekr, Faw, Volkswagen and BYD, as well as Evolute. Among the models, the leaders are Zeekr 001, Zeekr X, Faw Bestune NAT, Volkswagen ID.4 and BYD Song.
AvtoVAZ has joined the promotion of electric vehicles in Russia. At the Saint Petersburg International Economic Forum, an electric version of the Lada Niva SUV was presented, developed on the basis of the serial model and using electric components from the Lada e-Largus. AvtoVAZ positions the e-Niva as an experimental project aimed at developing competencies in the field of electric vehicles. Serial production is not planned yet.
In parallel with this, in September, production of the Lada e-Largus began in Izhevsk too. The launch of production at AvtoVAZ plant in Izhevsk was attended by the company's President Maxim Sokolov and head of Udmurtia Alexander Brechalov. e-Largus is expected to appear at dealerships no earlier than the end of the first quarter of 2025. The model will be presented in two body styles: a passenger station wagon and a commercial van. The key issue remains the price, which, according to preliminary data, will be from 2.99 million rubles, taking into account the state subsidy, and more than 3.9 million rubles without the subsidy.
Meanwhile, Nissan (in particular, the Leaf model), Zeekr and Tesla are leading the secondary market for electric vehicles.
More hybrids and fewer “Chinese”
The structure of the Russian automobile market has undergone radical changes over the past three years. The share of global brands (Japan, South Korea, Europe), which was 75% in 2020, decreased to 10% in 2024. Now the market is divided between Chinese brands (59%) and Russian (31%).
Director of Avtostat agency Sergey Tselikov identified six main trends that determine the future of the industry:
- the share of Chinese brands will no longer grow, but the share of global (“departed”) brands will continue to decline;
- sales of electric vehicles will fall, they will be replaced by hybrids;
- the average price will increase, now it already exceeds three million rubles;
- the share of SUVs (a large frame car with a 6— or 8-cylinder engine) will increase, now it is about 70% due to the growth in sales of Chinese models;
- car imports will continue to grow, but the share of “alternative” ones will fall due to the recycling fee;
- dealerships in the country will be transformed, their peak has already occurred in the second and third quarters of 2023.
According to Avtostat’s forecasts, in 2024, sales of new passenger cars in Russia will reach 1.59 million units, which is 50% more than in 2023. Forecasts for 2025 vary: the baseline scenario assumes a 10% decrease in sales (to 1.43 million cars), the pessimistic one — by 20% (to 1.27 million), and the optimistic one — maintaining the 2024 level (1.59 million).
Ruslan Abdulnasyrov, owner and CEO of the federal network of used car dealerships Avtoset.RF and Apelsin group of companies, believes that the results of the year for the auto retail industry cannot be called either bad or outstanding. Most companies, according to him, are ending the year with positive financial results, although the results vary, but there is cause for concern:
According to him, the main trend of the year is the rapid growth in sales of domestic cars, and this is quite expected. Chery, Haval and Geely remained the leaders, as in the previous year: “It is interesting that representatives of Chinese brands in the middle segment are already turning to the leaders for experience, studying their interaction with dealer networks. It is not yet clear whether this will lead to specific changes in their strategy, but the very fact of such interest deserves attention.”
As for the return of departed automobile brands, only the country's president Vladimir Putin can decide. Not long ago, at a business forum, he was asked this question. He answered that everything depends on the geopolitical situation, on the manufacturing country and its position in relation to Russia. So the decision is up to the president, — he added.
The expert believes that car maintenance will be affordable for a Russian. If someone cannot pay for repairs at a service centre, they can always buy tools and service the car themselves. “And purchasing power is a key factor that depends on many things, for example, on the macroeconomic situation in the country. Honestly, I can't even imagine how we can get a complete picture while we are all waiting. We are waiting for the Central Bank's statements, and only then will we make our decisions,” Abdulnasyrov explained.
When the recycling fee was announced, many who planned to buy a car, according to him, rushed to do so before the prices went up. After the fee was introduced, cars became more expensive, although not sharply, but gradually. “This greatly affects purchasing power: cars are becoming more expensive, the interest rate on loans is high. Therefore, things have not been going well in the automotive industry for the last month and a half to two months,” the speaker concluded.
According to him, this led to the fact that November sales dropped significantly compared to October — by 29%. And real sales in October were already lower than in September. The growth of the key rate also increased the cost of borrowed money for dealerships and seriously increased the burden on servicing working capital, especially for those players who worked with borrowed funds — and this is the majority of the industry, the expert explained. The car market, in his opinion, has entered a phase of stagnation the exit from which is possible only by returning the key rate to a level no higher than 16-18%, i.e. not earlier than the second half of 2025.
“In the new conditions of the car market, the most advantageous brands are Russian-made, these are LADA and Moskvich, which are not affected by the growth of recycling rates and can afford to restrain the growth of prices for their models, as well as Haval brand, whose key models are produced at assembly facilities in Russia. There simply cannot be another adaptation today, the way out and the path for all players are one — localization of production in Russia,” Karaulov believes.
According to him, the intensification of competition between distributors in the country will inevitably push them to use free assembly capacities at plants in Kaluga, Nizhny Novgorod, St. Petersburg, Kaliningrad and other cities. As for the forecast for 2025, under an optimistic scenario, according to the expert, the market will be close to the 2024 level — 1.5 million cars. “I would call the base forecast 1.3 million new cars, and the pessimistic one is up to 1 million. The maintenance of the car remains affordable, but the affordability of the car itself is primarily a question of the key rate and the cost of retail car loans,” the interlocutor explained to the newspaper.
As for the main trends and changes, the client in the mass segment of brands is starting to get used to the ‘Chinese’”, the expert continued. Many Tatarstan and Russian car enthusiasts have begun to reconsider their decisions in favour of brands from the Celestial Empire. Chinese automakers are learning quickly, adapting trim levels, options and promptly releasing new models. According to the speaker, the leaders are brands such as Haval, Chery and Geely.
“The share of global (‘departed’) brands on the Russian market continues to decline, and Chinese ones will no longer grow. The fate of the “departed” brands depends on many factors, including the geopolitical situation, the economic situation and the strategic decisions of the companies themselves. The forecast for the development of domestic auto production will depend on its ability to adapt to changes in the market, introduce new technologies and compete with foreign manufacturers,” Rita Khalilova believes.
For the successful development of domestic auto production, she believes it is necessary to take into account the needs and preferences of consumers, as well as actively cooperate with government agencies and other market participants. In general, Russian automakers, according to her, can continue to develop and produce new car models adapted to local operating conditions and market needs. At the same time, the increase in the recycling fee in the fall of 2024 led to an increase in prices, which negatively affected demand. High interest rates on loans have sharply limited the circle of buyers among Russians, which shows a decrease in purchasing power and the affordability of car maintenance for the Russian consumer.
“The main factor influencing the market now is the cost of financing and the key rate. In addition, the weakening of the ruble can lead to an increase in car prices, and the indexation of the recycling fee predicts a decrease in sales in early 2025. In the baseline forecast, sales of new passenger cars will fall by 10% compared to 2024 and will amount to 1.43 million cars. Light commercial vehicles will end the year with 118 thousand cars sold (+5%), and 117 thousand trucks will be sold (-6%),” the expert added.