‘Prejudice persists’: domestic car industry losing its share in fleet of Tatarstan

Share of domestic cars in Tatarstan has decreased

The fleet of passenger cars in Tatarstan has increased by 0.5% over the year — from 1.29 to almost 1.3 million cars — and exclusively at the expense of foreign cars, Alexander Klimnov, an expert at Autostat Info, told Realnoe Vremya. Foreign cars account for 62% of the fleet (803 thousand cars) against 61% (783.3 thousand) a year earlier, and Russian-made passenger cars — 38% (493 thousand cars) against 39% (500.6 thousand) at the end of 2022.

“The decrease in the share of domestic cars may be due to several factors," explains Dmitry Baranov, a leading expert at Finam Management company. “Firstly, the variety of car brands represented on the domestic market. Such a large selection has been formed over several decades. Even the termination of the work of a number of well-known car companies in the country practically did not change the situation, they have been replaced by products from other automakers. Secondly, with the continuing prejudice of some consumers towards the products of the domestic automotive industry, even despite the drastic changes in it.”

The fact that AvtoVAZ's leadership in the number of cars sold is about to end has been talked about for many years, but this is not happening, Baranov recalls: “You shouldn't be surprised, because this is a completely different company than a few decades ago. AvtoVAZ is not standing still," the analyst says. “The company has developed a new development strategy, carried out a large-scale modernisation, increased product quality, found new suppliers of components, established a sales and service network throughout the country. The company regularly updates its model range, operates in many markets, its products are well known, so it is not surprising that cars are in stable demand among consumers. Therefore, this year the company can become a sales leader.”

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According to Autostat-Info, LADA is in the top 5 brands in the Tatarstan fleet with 438.5 thousand and the largest share in the local fleet — 33.8%. The second — KIA with 113.5 thousand cars and with a share of 8.8% in the fleet, the third — Renault with 90.6 thousand and a share of 7% in the fleet, the fourth — Hyundai with 85.8 thousand and a share of 6.6%, and the fifth — Volkswagen with 53.8 thousand, with a share of 4.2%.

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The most numerous models in the Tatarstan fleet are Lada 2190 Granta (57,156 cars), KIARio (55,328 cars), Lada 2114 (41,906 cars), Hyundai Solaris (38,667 cars), and Lada 2107 (28,547 cars).

Tatarstan's car fleet is not getting younger. As of the beginning of 2024, there were 31.2 thousand cars produced in 2023 in the Tatarstan fleet, another 24.8 thousand cars produced in 2022, and 58.7 thousand cars produced in 2021. Thus, there are 114.7 thousand cars under the age of 3 in the Tatarstan park (a share of 8.85%), and cars older than 10 years — almost seven times more — 707.7 thousand.

The Russian car fleet, according to Alexander Klimnov, an expert at Autostat Info, also continues to age. In 2023, there were more fresh cars in the Russian fleet under the age of one year — 788.6 thousand against 648.1 thousand in 2022, but at the same time, there were 8.7% fewer three-year-olds — 2.9 million (6.7% share) versus 3.2 million (7.5% share) in 2022. At the same time, the federal fleet has grown by almost 1.5%.

The fleet of “oldtimers”, cars older than 30 years, reached 2.6 million units. “And the authorities simply do not know what to do with them — to prohibit and increase environmental taxes and insurance, or, on the contrary, to recognise “social transport” for elderly summer residents and reduce taxes and simplify technical inspection, but with the condition of seasonal operation, for which special registration numbers should be introduced," he says.

What will happen to the car market in 2024?

Experts disagree on how the fleet will grow in 2024 — from a conservative scenario of +10-15% (up to 1.1-1.2 million cars) to an overoptimistic +70-80% (1.75-1.85 million cars).

“Definitely, a price war among Chinese automakers should begin at the beginning of the year. The increased waste collection has seriously undermined the positions of a number of them," Klimnov notes. “But the leading five (or even six) Chinese brands will definitely stand on their feet, including due to the organisation of assembly already in Russia.

Besides, Klimnov predicts that production and, accordingly, sales of domestic brands should increase. AvtoVAZ alone is going to produce up to half a million LADA cars, including the expansion of production of the Vesta model (plus a new Aura based on Vesta) and the restart of the Largus model (and possibly the launch of one or two more brands), the expert lists. It will be joined by the manufacturers such as Moskvitch, Evolute, Avtotor, Sollers Group (Aurus and UAZ brands), shut down plants of the St. Petersburg and Kaluga clusters, as well as Nizhny Novgorod GAS and the revived Volga brand.

“If there are no global force majeure events, then the market should grow, which means that the aging of the fleet will slow down," he believes.

AvtoVAZ and four Chinese

“According to Avtomarketolog PLC, 41,696 passenger cars were sold in the Republic of Tatarstan in 2023. The top 5 passenger car sales in the Republic of Tatarstan included the following brands: Lada — 17,037 (40.9%), Haval — 4,333 (10.4%), Chery — 4,090 (9.8%), Geely — 2,199 (5.3%), and Omoda — 1,279 (3.1%)", Rita Khalilova, the sales director of KAN AVTO Group, told Realnoe Vremya.

Besides, demand for electric cars is growing in Tatarstan. 367 electric cars were sold in 2023, according to Avtomarketolog PLC. Compared to 2022, sales increased 5.4 times. The undisputed leader among electric cars in the region is the Zeekr brand (105 cars), Khalilova noted.

“The common Lada and Chinese brands — Haval, Chery, Geely, Omoda, Changan — will still remain at the top of the car market in 2024, she predicts. “Also, many new products of lesser-known brands from China are entering the market — Dongfeng, GAC, and Jaecoo.

People are also ready to buy cars produced in 2012-2014

By the results of 2023, 178,972 supported passenger cars were sold in Tatarstan, which is 4.3 times more than sales of new cars. “Based on these data, we can safely say that used cars are more popular today than new ones," Khalilova said.

“Our customers buy used cars more often. If we consider the results of the entire year 2023, then they accounted for 61% of all sales," confirmed Daniil Zubarev, CEO of Transtekhservis Management Company PLC.

At the same time, in the fourth quarter, the gap, according to him, decreased. “The increase in the key rate and support programmes for new cars affected — new cars accounted for 44% of sales, and used cars — 56%," Zubarev said.

Within the framework of the TTS, the most popular used cars in the fourth quarter of 2023 were LADA Granta, KIA Rio, Hyundai Solaris, LADA Vesta, and LADA Kalina. “Most often, customers chose cars of 2018-2019. But there are also a lot of those who choose cars produced in 2012-2014," he said. LADA (AvtoVAZ) and Chinese — Haval, Chery, Geely, and Changan — are popular among new cars in the TTS.

Daniil Zubarev also notes the growing demand for electric cars. “In the fourth quarter of 2023, sales of the Moskvich 3e electric crossover and electric cars of the premium Voyah brand increased. The infrastructure of electric charging stations is developing, and it can be expected that motorists will more often make a choice in favour of electric cars," he believes.