When will cars start getting cheaper?

Cars imported to Russia will become cheaper in the fall. Prices will fall for both new and used cars

From September 1, Russia will reduce customs duties on imported new and used cars. This decision is due to agreements with the WTO. Import duties are reduced only for legal entities. So, if now for each new imported foreign car, legal entities pay 17% of the cost of the car in the form of customs duties, then from September 1 this amount will decrease to 15%. And the duty on a used car will be reduced from the current 22% to 17%.

Note that this is not the first time Russia has reduced the amount of customs duties. At the same time, importers are forced to pay other duties. In particular, now a certain amount must be deducted from each new and used car, the amount of which is calculated based on the engine size. However, this fee will also decrease from September 1st. Thus, according to published information, the size of this rate will decrease by 2% (by approximately 0.05 euros per cubic centimeter) for new cars and by 5% (by 0.06 euros) for used ones.

Despite the reduction in customs duties, foreign cars should not fall in price sharply. This is explained by the fact that importers are forced to pay other fees imposed on cars supplied from abroad. So, from 2017, they must pay 84 thousand rubles for new cars with engines with a volume of more than one liter and 126 thousand for 2-3 liters. This money is collected in the form of a recycling fee. If the engine volume is 3-3.5 liters, then this amount increases to 114.6 thousand rubles; exceeds 3.5 liters - 181.6 thousand rubles.

In addition, the ERA-GLONASS complex is required to be installed on every imported car. And from next year, stricter rules will come into force regarding the procedure within which the compliance of an imported used car with Russian legislation is checked.

All of the above means that the reduction in customs duties will have virtually no effect on the Russian market: all “discounts” will be covered by the recycling fee. Perhaps this government decision will lead to the appearance of American pickup trucks and more electric cars in our country. At the very least, it will become more profitable to import these cars to Russia. It is possible that the sports car segment will expand due to several new models.

When will car prices fall in 2019?

When will car prices fall in 2019? Which brands should we expect prices to decrease, and which cars will become more expensive? Is it worth buying a car now or is it better to wait a little?

It is worth recognizing that there is indeed cause for concern. The impending default of 2019 may well collapse the automobile market. Moreover, this will also affect the domestic automobile industry. For example, one can hardly expect that prices for VAZ cars will fall, since the equipment at the plant, consumables and even the shareholders themselves are almost all foreign. The plant has undergone more than one modernization in recent years; its equipment has been replaced with imported equipment, but it needs to be maintained by paying dollar bills. And expensive repairs of the welding robot, replacement of drive pulleys in the press, updating software - all this will add additional costs to the plant. And the bills there are by no means three-digit.

Foreign cars will definitely rise in price in 2019, domestic cars, as well as Ford, Fiat, Chevrolet, Toyota, Audi, Nissan, Mazda, KIA, Hyundai assembled in Russia will also increase in price. Moreover, many foreign assembly lines in Russia will close if sanctions are not lifted. After all, many factories have become truly unprofitable in just a few years. Therefore, you certainly shouldn’t expect a reduction in prices for passenger cars in 2019. The price of VAZ cars will also increase, since there is now an unprecedented demand for them - the car plant in Tolyatti is trying to take advantage of the situation.

But commercial vehicles, minibuses, off-road vehicles may well, if not become cheaper, then not rise in price so sharply. Russia now needs to boost its domestic economy, so a fall in prices for Gazelle, UAZ, Kamaz, and ZIL is quite possible. But this is only realistic if the government at least somehow pays attention to domestic factories.

So when will car prices fall in 2019? If the price of the dollar stabilizes, then a slight decrease in value is possible only by the summer. If the rise in the value of the currency continues, the cost of cars will not only not decrease, but may even break all records. So Belarusians who are hysterically buying cars in Moscow car dealerships are doing the right thing. In any case, it will be more expensive in 1-2 months. So, if you want to save money, hurry up and buy a car today.

Why cars won't become cheaper in Russia

Prices will not fall even if the dollar exchange rate drops to 30 rubles

Often in intimate conversations with friends and acquaintances I hear arguments that, they say, cars in Russia should soon become cheaper. The logic is simple: in 2014 the ruble collapsed - cars became more expensive. Now the ruble is strengthening (well, at least it was until recently) - by the same logic, cars should become cheaper.

"Recover" losses

But no one in these discussions takes into account that the ruble has fallen almost twice, and cars have risen in price by an average of 20%. Some brands rose in price by 26%, some by 16%. Someone completely curtailed sales in Russia due to the low “margin” of the business. Those who remained worked and sold cars for minimal profit. Without exception, brands have cut costs and shaken up their businesses to reduce costs. People were laid off, press parks were reduced, and there were fewer events. Advertising costs have decreased greatly (and because of this, by the way, all automobile publications without exception have suffered).

Some manufacturers have shifted part of the burden to dealers, reducing their margins (because of this, many car dealerships have closed across the country). Some models have ceased to be sold in Russia due to unprofitability.

The Pentagon doesn’t know how to defeat Krasukha-4 and Moskva-1? People in the USA are not yet familiar with “Wonderful Sea”!

Now things seem to be looking up. Sales of new cars are growing steadily, previously removed models are returning to the market, and absolute new items are appearing. However, there is no need to expect prices to begin to decline.

For more than three years, manufacturers have been working in Russia with minimal profits, selling cars in our country much cheaper than the world average (in dollars). Some models in Russia could be bought at half the price than abroad. And now, by the way, most cars are cheaper here than in Germany or the USA.

Cheaper in Russia

For example, in terms of rubles, a Mercedes S-class in Russia costs 6,940 thousand rubles, in the USA - about 7,468 thousand rubles, in Germany - 7,718 thousand, and in China generally 10,943,000 rubles. And this situation is not only with “premium”. In Russia, the Lada Granta will cost the buyer from 370,000 rubles. In Germany, its minimum price in terms of 750,000 rubles.

What is most likely to happen now? At best, cars will not become more expensive, but they will probably still become more expensive, even if the ruble continues to strengthen. Manufacturers will strive, firstly, to bring the profitability of their business in Russia to the world average. Secondly, to win back the profits that have been lost since the end of 2014.

So those who are waiting for cars to become cheaper, don’t wait. They won't get cheaper. They will only get more expensive.

But there is good news - there will soon be more choice.

When is the best time to buy a car?

How seasons affect the cost of a new car

You should buy a new car when it is hardest to sell. Let's look at how the months of the year affect the cost of a new car.

January and February. The best time to buy a new car is as it is the end of the financial year for dealers. New-year cars will soon begin arriving in showrooms, so dealers are making room for them and selling off last year's cars. To do this, they reduce the cost of the car by 10-20% and give pleasant bonuses - smartphones, laptops, sets of wheels.

March. A month before new cars arrive in showrooms. The most tempting promotions have passed, gifts have already been distributed, but prices for last year’s models remained low, and some fell even more.

April and May . At the beginning of April, fresh, recently released cars arrive at car dealerships, for which the highest prices are set. It makes no sense for a car dealer to give in on price—cars that have just arrived are sold at full price. If you want to save money, put off buying a car at least until June, and preferably until December.

June and July. People go on vacation, demand for cars falls, and they temporarily become cheaper. Dealers are trying to fulfill the sales plan, so they make concessions - they arrange seasonal offers, discounts or give inexpensive trips to the sea.

August-November. In autumn, people return from vacation. The situation in the car market is reminiscent of spring - the demand for cars is growing, there are no sales or discounts, and there are no gifts either. From mid-October, due to the proximity of the New Year, prices begin to gradually fall.

December. Time for New Year's discounts. This month you can find many interesting offers, however, compared to January, this is an extremely ambiguous period. Marketers take advantage of the New Year's mood of buyers and use various tricks. On emotions, a person can make a rash purchase, which he will regret later.

How seasons affect used car prices

Changes in the market are changing the sentiment and motivation of used car sellers. Let's figure out when it is most profitable to buy a used car from a private owner.

Spring and summer. The demand for used cars is growing; they are being bought by novice drivers who went to driving school in the fall and received their license in the spring. They are looking for the first cars that they don’t mind breaking. Sellers can choose buyers, so they become less accommodating and are in no hurry to sell. At this time, it is difficult to buy a used car profitably.

Autumn and winter. The year of manufacture affects the cost of a used car. No matter how excellent the condition the car is, with the onset of the new year it will become a year older, which means it will become cheaper. Therefore, every seller is in a hurry to sell a used car before the first of January and is ready to give in on the price before the car becomes even cheaper.

In December, the seller can reduce the price in order to have time to buy a new car in January - at this time there are excellent discounts on last year's cars. Therefore, if you are ready to buy a car right away, you can bargain and save 5-10% of the original cost.

When is the best time to buy a car?

Winter is the best time to buy a new car. In December, the number of sales falls, car dealerships reduce car prices, discounts reach 20%. The decline continues into January as potential buyers spend money on New Year's gifts. At the same time, cars become last year’s and begin to lose value. When you sell a car in 2-3 years, the buyer will ask for a discount for the extra year in the title.

It is better to buy a new car in January, and a used one in the first half of December, during low demand and before car dealer promotions.

The main thing is not to rush into the purchase. Select your make, model, and browse listings year-round. Interesting offers appear on the secondary car market, regardless of the time of year.

A sharp increase in prices for new cars from January 1, 2020: for which cars and by how much?

After reducing duties on the import of finished cars into the Russian Federation, the Ministry of Industry and Trade proposed increasing the recycling fee. According to preliminary calculations, its rates could increase by an average of 80%, in the passenger segment - by 110%. This could lead to a sharp rise in prices for new cars from January 1, 2020.

A sharp increase in prices for new cars from January 1, 2020: for which cars and by how much?

Russia has halved duties on foreign cars. From September 10, duties on the import of passenger cars into Russia have been reduced by 2 percentage points to 15% of the cost of the car.

Thus, Russia has fulfilled the obligations undertaken upon joining the World Trade Association. Negotiations lasted for 18 years, and the protocol of accession was signed in December 2011. Among other obligations, it provided for a gradual reduction by Russia of duties on foreign cars from 30% to 15%.

Officials and domestic automakers feared that lowering duties would increase the attractiveness of car imports, freeze investments by global automakers in Russia, or even lead to the closure of their factories, recalls an employee of one of the automakers. At that time, all the leading manufacturers were already operating in the country - independently or together with local partners. They were attracted by the benefits (mainly zero import duties on components, access to demand support programs, etc.) that the state offered in exchange for the construction of automobile plants and increasing the localization of cars produced in Russia.

But there was no influx of foreign cars into Russia, and the closure of some factories (GM, Ford) occurred due to a shrinking market - for the same reason, these companies decided to completely curtail sales of passenger cars in Russia, Vedomosti’s interlocutor continues.

Utilization collection doubled: how car prices will increase

Russian Prime Minister Dmitry Medvedev approved an increase in recycling collection rates from January 1, 2020, the Kommersant newspaper reported on Monday, November 25, 2019.

• Rates will increase most noticeably in the passenger car segment - by an average of 110.7%.
• At the same time, cars with an engine up to 1 liter will suffer less (an increase of 46.1%),
• and SUVs and premium sedans with an engine from 3.5 liters - more (an increase of 145%).
• The collection for the most popular car segment in Russia - with a 1-2 liter engine - increases by almost 112.4%.

The recycling fee was introduced in 2012 as compensation for a reduction in duties after Russia joined the WTO. At first, only importers paid it; since 2014, the fee was extended to all car manufacturers, but industrial subsidies were introduced for those localized in the Russian Federation. They will be received only by those who have signed SPICs - special investment contracts.

New year, new promotion

The government plans to receive 150.2 billion rubles into the budget through indexation of the collection. in 2020 and 48 billion rubles. in 2021. Next year they intend to accumulate 77.3 billion rubles from the import of cars.

The increase in recycling rates is a reaction to a decrease in customs rates to maintain the overall level of tariff protection, the office of Deputy Prime Minister Dmitry Kozak explained to Kommersant.

In the first half of 2019, according to PwC, the share of imported cars in the Russian market was 17%.

At the same time, as one of the publication’s sources on the car market notes, the minimum possible cost of cars has already been reached due to a drop in demand; there is no stock in warehouses. Now, due to the increase in recycling collection, everyone will have to raise prices. In fact, the profit of many concerns is generated only from imports, which support local production.

Most factories were built on the assumption that the market would absorb 3 million cars a year. But now they are underutilized: last year 1.8 million cars were sold in the country. The car market has fallen for the seventh month in a row. According to the AEB, in January-October sales decreased by 2.4%, to 1.4 million cars.

Car dealers, of course, will pass on the increase in recycling fees to buyers. Prices would have increased from January 1 even without the recycling fee due to the traditional update of the model range and other factors. But increasing the recycling collection will have an additional effect, Autostat notes.

Autostat expert Sergei Udalov estimates a possible price increase of up to 4%.

However, the head of the Ministry of Industry and Trade Denis Manturov promised that even with the increase, the share of recycling collection in the cost of cars will remain within 1.5-2%.

In addition to the increase in recycling fees, the rise in car prices may be partly caused by the abolition of compensation duties on components. And this is an increase in prices by another 2-3%. As a result, the cost of a new car may increase by 7-9%.

As for domestically produced cars, one should not expect a significant increase in cost, dealers say. The fact is that the increase in recycling collection is compensated to domestic manufacturing plants.

As the Ministry of Industry and Trade previously explained to Gazeta.Ru, an unstable ruble will primarily affect the cost of imported foreign cars; they will become more expensive.

It should be easier with localized models, since the share of the ruble component in the price of Russian-assembled cars continues to grow.

In 2018, a significant number of brands completed the investment cycle to localize production in Russia. The cost of foreign cars produced in our country already has a ruble component. For some Western brands, the ruble component in the price of a car exceeds 80%.

At the Avilon car dealer, prices will most likely increase by 3-5%. A detailed breakdown of retail prices has not yet been made, but it is clear that now cars with a smaller engine capacity will be in even greater demand, the company explained to Gazeta.Ru.

They also clarified that the price tag of almost all car dealers will be rewritten in one way or another in early January. No one will wait until the end of the New Year holidays, since car dealerships will be open on these days.

AvtoVAZ told Gazeta.Ru that it was preparing a response regarding the recycling fee. In the end, the answer was: “Being a Russian automaker, LADA does not expect big changes in its pricing policy,” said Sergei Ilyinsky, head of the AvtoVAZ press center.

Now let's see what another expert's point of view is:

In 2020, new cars will become more expensive

Author: Alexey Batushenko, Source: avtovzglyad.ru

To compensate for the reduction in import duties, as required by WTO rules, the Russian government intends to increase the recycling fee on all new cars sold on our market.

Russia, fulfilling its obligations to the World Trade Organization, has reduced customs duties on the import of cars to 15%! When joining this international association, this customs barrier, let us remind you, was at the level of 25%!

But does this mean that new cars imported into the country will now become cheaper and it will be possible to drive used ones from Europe again?

Alas... In fact, there is absolutely nothing to be happy about here, since the reduction in duties will lead, as has been repeatedly tested in practice, to... an increase in prices for absolutely all new cars. Even on AVTOVAZ models, which certainly cannot be called imported.

And all because the Russian authorities, in constant concern for the welfare of the electorate, are doing everything to prevent citizens from buying an inexpensive but high-quality foreign car and at the same time forcing foreign automakers to organize the production of their cars on Russian territory.

It’s just that customs duties were actually converted into another payment - the so-called recycling fee.

• The base rate of this fee is set at 20,000 rubles per car.
• Depending on the engine displacement of a particular car, it is multiplied by the coefficient established by the government and - voila, the amount of the recycling payment is obtained.

At first it applied only to cars imported into our country, but later it was extended to all cars sold in our country, although the share of imported vehicles in our market now does not exceed approximately 15%.

To get a feel for what it is, but not get bogged down in numbers and tables, let’s consider the recycling fee in relation to the most common category of new cars - with engines with a displacement of 1-2 liters.

Once we joined the WTO and the import duty was reduced to 25%, the coefficient mentioned above was set at 1.34. We multiply it by 20,000 rubles and get the recycling payment that existed at that time for such a car. Since then, the customs rate on cars has been lowered several times: to 23% in 2016, to 20% in 2017, then to 17% in 2018, and now to the current 15%.

At the same time, the recycling fee coefficient increased: from the original 1.34 to the current 4.2 for cars with engines of 1-2 liters. For larger engines it is, as you understand, even higher.

Accordingly, the scrap payment for all(!) new cars on the Russian market has more than tripled since 2012. And all automakers, of course, passed this rent onto the shoulders of car buyers. We emphasize - buyers of all cars, not just imported ones.

According to various estimates, each increase in the recycling fee increases average Russian prices for new cars by 2-4%. And after the current reduction in duties, exactly the same story awaits us. The Ministry of Industry and Trade has already prepared documentation for government approval for the next increase in the recycling fee from January 1, 2020.

With the previous reduction in duties to 17%, the recycling fee increased in the case of the cars we are considering by approximately 85%. Now, with duties reduced to 15%, we can expect a similar increase in the recycling fee. Market experts talk about 80-110% growth.

We will believe in the good will of the state and directly extrapolate the ratio of the previous increase to the one expected from the New Year. We get growth at the level of 56-57% of the current one, the coefficient for the category of cars we are considering may be in the range of 6.4-7.

That is, when buying a car with an engine smaller than 2 liters, after January 1, 2020, you will have to overpay at least 120,000 rubles. An excellent New Year's gift for dear Russians from an equally dear government.

It is especially valuable in the context of the ongoing decline in the domestic car market throughout this year, caused by a reduction in real incomes of citizens.

Russia will experience a sharp rise in car prices in 2020

In Russia, a sharp increase in car prices is expected in 2020. The reason will be that large manufacturers of automotive components have been deprived of government support.

“A widespread and sharper increase in car prices is expected from 2020, when component manufacturers will no longer receive benefits,” writes the Kommersant newspaper. At the moment, in Russia there is a so-called agreement on industrial assembly between automakers and the Ministry of Industry and Trade. With the help of this document, the government regulates relations with companies whose production is located in Russia. The document outlines possible government support measures for the industry.

Automotive component manufacturers also sign similar agreements with the department. It is these agreements that will cease to apply in 2020, which, according to the publication, will inevitably lead to an increase in car prices. Thus, AvtoVAZ has already changed the prices of its cars since August 1, increasing the cost of Lada models by an average of 0.9%. Hyundai and Nissan are also preparing to increase the cost of cars. Source: Ura.ru