Avilon cuts forecast for Russian automobile sales to 1.1 mln in 2025, expects revenue to fall 5%

MOSCOW. April 18 (Interfax) - Avilon Group, a major Russian car dealer, has lowered its 2025 forecast for new car sales in Russia to 1.1 million-1.2 million from the previously expected 1.4 million vehicles, and now expects its own new car sales to drop to about 20,000 from the 24,000 sold in 2024, company CEO Alexander Nikonov said.

"In our budgeting we targeted a market of 1.4 million automobiles for 2025. Now I clearly see that it certainly won't be 1.4 million. The market will probably be around 1.1 million new automobiles, although I increasingly hear talk that it might even be a little less than 1 million. But my estimate is in the range of 1.1 million-1.2 million cars, not including LCVs," Nikonov told reporters.

He said Avilon's budgeting for this year anticipates a drop in revenue of about 5% to slightly below 100 billion rubles. The company's revenue grew by 20% to 100.9 billion rubles in 2024.

"Of the negative trends of this year, I'll note that our average price of a sold automobile is decreasing by about 10%. Not because vehicles are getting cheaper, but because the mix is changing within our sales. Last year we sold [about] 24,000 new automobiles. This year the mix has changed and the average price has changed, which could put pressure on revenue. Even if by units everything will be more or less good, we still might drop somewhat year-on-year. I see sales of new automobiles this year at a level of 20,000 units, though we might not quite get there," Nikonov said.

He said Avilon is not having a critical problem with inventory, which now totals about 2,800 new vehicles across the group, or the equivalent of 1.6-1.7 months of sales.

"This is not a high stock. There is an industry norm - two months of sales, if business is going alright. If business is growing and sales are growing, dealers go to 2.5 months. If, on the contrary, there is volatility, to 1-1.5 months. A dealer now needs stock for 1-1.2 months to work well and breathe financially. This will not slow sales and it won't be expensive to finance. We have 1.7 months and I see this level as more or less healthy. If it goes lower, we already won't be able to offer the buyer something," Nikonov said.

He also said the Central Bank's tight monetary policy, including its introduction of macroprudential restrictions that limit lending to heavily indebted individuals, continues to put significant pressure on the market.