The exodus of major global automakers has opened the door to Chinese and Iranian brands
Car dealerships across Russia have been reporting inventory shortages of new mid-priced cars, the newspaper Izvestia wrote on Thursday.
According to the report, the Russian dealers of Volkswagen, Kia, Skoda, Citroen, Opel, Renault, and Hyundai are currently offering just over 300 such cars on their websites.
The Association of Russian Automobile Dealers, meanwhile, claims that the number of affordable cars is now merely in the dozens, noting also that the shortage has pushed up prices. The basic model of Kia Rio now costs 1.5 million rubles (over $18,000), up from about 900,000 rubles ($11,000) in 2021.
The ‘parallel imports’ mechanism launched by Moscow after the withdrawal of Western brands to allow the import of goods without a brand license from the rights holder could help replenish the stocks of Russian dealers, the vice president of the National Automobile Union, Jan Haytseer, told Izvestia. He noted, however, that this could be “simply unprofitable,” given that logistics and customs clearance costs significantly affect the final cost.
Meanwhile, the exit of Western and Japanese companies has provided an opportunity to rising industry players such as China and Iran.
Chinese auto makers have embarked on a major expansion in the Russian market and are expected to reach a 60% share of total sales this year, according to car-dealer chain Autodom. China exported over 160,000 cars to Russia last year, more than doubling its share of the country’s auto market.
Major Iranian automaker SAIPA is set to launch car sales in Russia in June. It will reportedly deliver a total of 45,000 vehicles to the Russian market over three years under an export contract valued at $450 million. Another Iranian auto major, Khodro, is currently undergoing certification in Russia for future vehicle deliveries.
Experts say the current situation could also boost the Russian auto industry. Car manufacturer AvtoVAZ told Izvestia that it plans to double production this year to more than 400,000 cars. According to the company’s press service, AvtoVAZ has the capacity to produce up to 500,000 vehicles a year.
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