The
Russian car market is protected by import duty so brands with any
volume of note had assembly plants. Sanctions came and foreign producers
decided to pull out. Lada was owned so by Renault so that was an
uncertain situation too.
Renault gave away its ownership, leaving
the national car maker to find its own way. With Lada, some Chinese
assembly and a few local light commercial companies, it didn’t look too
flash. Of course, there are plenty of cars for Russians to drive around
in so it wasn’t a big deal for now but in time an issue of growing
concern.
A quick overview of domestic registrations shows August
’22 they were -62% and -64 YTD so were understandably well down and
August was par for the YTD figure. Where can new stock be obtained?
After
a pause, Lada first started production of the Granta but without ABS,
airbags, belt tensioners or an immobilizer. It now features two front
airbags so that’s an improvement. Shortly thereafter, the Niva Legend
also recommenced but the Vesta, Largus and X-Ray are not being made and
Lada has had problems bringing them back into production.
The
other source to tap into is China, not large suppliers of cars at
present with import duty on anything imported impacting on the price
unless large scale assembly is embarked on. Currency fluctuations and
reputations affected by dealing with Russia will also be issues to
consider.
Below are sales for August and already we can see Lada
and Chinese brands taking over as others sell off existing stock. All
the brands doing best are local and Chinese (yellow shading). Lada’s
sales increased 75% on July while market share has gone up from 18% to
43% compared to August ’21. However, with sales well down, volume was
actually down too, albeit only to a slight degree.
Data source: AEB.

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