Russian car market shows record sales volume in 10 years in Aug amid expected rise in recycling fee
MOSCOW. Sept 4 (Interfax) - Domestic sales of new passenger cars and light commercial vehicles (LCV) in Russia surged 35% year-on-year to 155.3 million vehicles in August 2024, the Association of European Businesses (AEB) said in a press release, citing data from JSC Passport Industrial Consulting (PPK), a joint venture between Autostat analytical agency and JSC Electronic Passport operator, saying that the market has been demonstrating high dynamics in anticipation of the increase in recycling fees starting on October 1.
"Sales of new cars in August 2024 showed the best August result in 10 years, starting from 2015. Obviously, this is due to a range of factors. Firstly, it should be noted that, against the background of a shortage of offers on the market after February 2022, a significant deferred demand was formed. It has been satisfied as the market is saturated with new models. In addition, expecting the increase in disposal fees from October 1, buyers are in a hurry to purchase a new car. We also should not forget about the change in the tax legislation and further decisions on the key rate. Thus, the August which is used to be 'calm' due to holidays, hits a ten-year record," Alexei Kalitsev, chairman of the AEB Automobile Manufacturers Committee, said in the press release.
He notes that the market growth trend is highly likely to continue in September, "Unless new factors influencing consumer behavior emerge."
The Industry and Trade Ministry published statistics on the car market for August and the first eight months of 2024 based on PPK data the day before. According to the Ministry's estimate, which differs slightly from the data published by the AEB due to the specifics of the calculations, sales of new passenger cars LCV in Russia surged 33.1% to 158,400 vehicles, thus exceeding July' result by 8.8% this year. In January-August, 1.079 million passenger cars and LCVs were sold (+60.7%).
The Industry and Trade Ministry in mid-July published the draft resolution on increasing the recycling fee. The ministry has also proposed implementing a scale of annual fee indexation by 10%-20% per annum until 2030, starting next year, in addition to the actual increase by 70%-85% in the fee rate on passenger cars, LCV, trucks, buses and several types of special equipment starting on October 1, 2024. Specifically, the amount for the recycling fee for one new car of the most popular segment, with engine capacity of 1-2 liters, will increase from 300,600 rubles to 556,200 rubles at the next indexation in October, and immediately to 667,400 rubles at the beginning of 2025.