New car prices spike by 17 per cent in Russia, Chinese carmakers to benefit

The average price of a new car in Russia has jumped by as much as 17 per cent amid regional tensions.

The latest consumer price index (CPI) figures published by the official Federal Service for State Statistics, known as Rosstat, shows the price of domestic vehicles increased by 17.1 per cent between February 26 and March 4.

New cars from foreign brands also went up by 15.2 per cent over the same week.

The CPI figures are published by Rosstat each week, with 106 different goods and services tracked across 282 cities in Russia.

However, local automotive news outlet Kolesa reports even higher prices, with the Lada Largus now almost 30 per cent more expensive, according to the carmaker’s own website.

A large number of foreign car companies have already announced they are halting exports into Russia, while most local production has either been shut down or suspended, with international sanction stopping the flow of parts and money.

All of which places China’s burgeoning automotive industry in a position to benefit.

Chinese cars have been growing in popularity in Russia, tripling from a three per cent market share in 2020 to a nine per cent share in 2021 – far exceeding expectations.

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Eunice Lee, senior Asian autos analyst at Bernstein, says the restrictions imposed by the West will only help the case, with China refusing to participate in the sanctions.

"In the event that US and European Union sanctions on Russia stay for a prolonged period of time and US and European carmakers become effectively prohibited from doing business in Russia, there is potential for Chinese automakers to gain share in the Russia market," Lee said in a report quoted by Automotive News Europe.

Of the 122,800 Chinese vehicles sold in Russia in 2021, 24,587 were from Geely, 39,126 came from Haval, and Chery took the top spot, seeing a 250 per cent increase year-on-year with 40,874 cars sold, according to data from the Association of European Businesses.