Russia Used Car Market - Growth, Trends, COVID-19 Impact, and Forecast (2022-2027)

Russia Used Car Market is segmented by car type (Hatchback, Sedan, and SUV), by Propulsion (Internal Combustion Engine and Electric), and by Vendor type (Organized and Unorganized). The report covers the market size in value (USD Billion) for all the above segments.

Market Snapshot

Russia Used Car market
Study Period: 2018-2027
Base Year: 2021
CAGR: 6 %

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Market Overview

Russia Used Car Market was valued at USD 40 Billion in 2021 and is projected to grow at USD 56.74 Billion by 2027, registering a CAGR of 6% in terms of revenue during the forecast period (2022-2027).

The Covid-19 pandemic initially resulted in a slowdown in demand, as the country imposed lockdowns and travel restrictions to control the spread of the virus during 2020. However, restrictions eased by 2021, and demand for used cars started picking up pace and is expected to continue over the forecast period. Further, the ongoing Russia-Ukraine war has halted OEM production and a surge in new vehicle prices across the country, which in turn is likely to enhance the demand for used cars. The rise in new vehicle costs will further diminish new vehicle affordability for many consumers, which in turn increase the demand for used vehicles in coming years. 

Over the long term, The growing preference of consumers toward personal mobility is likely to increase the demand for personal vehicles. Flexible payment options through online platforms have encouraged industry participants to offer used cars at a reasonable cost. Flexible finance options provided by car dealers across the country likely to further enhance used car sales. 

Further, in wake of the notable internet penetration rate in Russia, the sued car companies are adopting various business models and are focusing on increasing the visibility of the online marketplace for providing better opportunities to the customer to conduct proper research before delving into buying an used car product. Such developments are expected to offer lucrative opportunities for players in the market.

Scope of the Report

A used Car is a pre-owned vehicle that has previously had one or more retail owners. These cars are sold through a variety of outlets through independent dealers, online sales channels, and others.

Russia Used Car Market is segmented by car type, by propulsion, and by vendor type. Based on the car type, the market is segmented into Hatchback, Sedan, and SUV. Based on the Propulsion, the market is segmented into Internal Combustion engines and Electric.

Based on the Vendor type, the market is segmented into Organized and Unorganized. For mentioned segments, the market sizing and forecast have been done on the basis of market value (USD Billion). 

By Car Type
Hatchback
Sedan
SUV
By Propulsion
Internal Combustion Engine
Electric
By vendor Type
Organized
Unorganized

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Key Market Trends

Hatchback and Sedan Used Car Sales to Witness Surge During Forecast Period

The hatchback and sedan cars segment holds a significant market share in terms of revenue in 2021 and is projected to grow during the forecast period. The growing consumer trend toward diving flexibility is likely to increase the demand for used hatchback and sedan cars across the country.

Russia has a major presence of car dealers including Volkswagen AG, BWM AG, and Mercedes-Benz and these companies are expanding their dealerships across the country and is likely to witness major growth during the forecast period. The Russia-Ukraine war has plunged car production across the country owing to which demand for used cars is high across the country. According to The Association of European Businesses (AEB), the sales of new cars in Russia has been declined by 50% in 2021.

Major vehicle manufacturers reopened their manufacturing plants in Russia. Renault has owned a controlling two-thirds stake in the Russian carmaker Avtovaz. High demand for Renault hatchback and sedan cars across the country also witnessing major growth in the market. For instance, In 2021, Avtovaz sold 350,000 vehicles in 2021, making profits before tax of EUR 186 million for Renault.

Besides these scarcity of luxury vehicles and other premium car models and long waiting times for new models are some of the key factors which expected to influence consumers to opt for affordable and easily available hatchbacks and sedans. For instance, Volkswagen in 2022
has suspended production at its Kaluga and Nizhny Novgorod sites until further notice. Japanese company Suzuki has suspended car exports to Russia and Ukraine from its Hungarian factory, and Daimler-Benz said it lowered output to two shifts at its Hungarian plant.

Therefore, above mentioned factors and developments to improve the sales of used cars especially hatchbacks and sedans and likely to poise growth positively during the forecast period. 

Keytrend1

Rise in demand for Used Luxury Cars across the country

The rise in demand for used luxury cars across the country is witnessing major growth in the market. In February 2022, the Russians became the owners of 166 used luxury cars. This is 60% higher than in February 2021.

Easy access to financing options, low entry prices, and annual maintenance contracts make the used car market more organized. Also, the average age of used luxury vehicles coming into the market is between 2 and 3 years compared to 5-6 years for a mid-size or small-scale vehicle, making them a better option in some cases.

  •  For 6 months of 2022, official dealers in Russia sold 216.4 thousand used cars. n other words, only every tenth used car for the previous six months was sold through dealer networks. In 2021, Russians purchased 602,000 used luxury cars. 

Factors such as the growing consumer preference for luxury cars and the country’s youth inclination toward the top brands operating in the market are expected to drive the demand for used cars. Besides these, due to the ongoing war, Countries around the world are tightening sanctions against Russia in response to the country’s invasion of Ukraine and as a result, companies are limiting, halting or fully exiting business activities in Russia, including many automakers. For instance, in March 2022 Renault announced that it would suspend some operations at its car assembly plants in Russia due to logistics bottlenecks that have caused shortages in components.

Further, decrease in new car sales indicate that majority of consumers are preferring used cars due to their own limitations like economic turmoil and limited availability of latest models in the country. For instance, According to Association of European Business (AEB), 55,000 new cars and light commercial vehicles were sold in Russia in March 2022, down by 63% from March 2021. All brands European, American and Asian suffered losses, but the hardest hit among the big sellers were Volkswagen, Skoda, and Toyota. The above mentioned trends indicate that market for used luxury cars to grow over forecast period. 

Keytrend2

Competitive Landscape

Russia Used Car Market is moderately consolidated owing to the presence of several major and regional players in the market. Some of the key players in the market include Genser Auto, Inchcape, Drom, Fresh Auto, ROLF, and many others. The players are currently focusing on capturing the growing used car market share in the country by adopting various growth strategies. For instance,

  • In May 2022, Renault sold its majority stake in the Russian car brand, Lada. The company has sold its 68 percent in AvtoVaz, Lada’s parent company, for one rouble.
  • In August 2020, The Avtomir car dealer and the Ozon online retailer launched the first car sales through a marketplace in Russia. Avtomir was presented at Ozon by 14 car brands, including about 100 different models and modifications such as Citroen, Ford, Haval, Hyundai, Geely, Kia, Mazda, Mitsubishi, Nissan, Peugeot, Renault, Skoda, Suzuki, and Volkswagen.

Recent Development

  • In March 2022, Inchcape announced that it is pulling out of the Russian market as a result of the ongoing conflict in Ukraine. The company stated that in light of the current circumstances, they have concluded that the Group's ownership of its business interests in Russia is no longer tenable.
  • In December 2021, Russia's largest car dealer Rolf has been sold to rival KlyuchAvto for an undisclosed amount. The announcement states that Alfa Bank will finance the deal. Unnamed sources value the deal at USD 400 million - USD 500 million, which is at least three times less than Petrov had initially planned to cash in from selling the company.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION (Market size by Value (USD Billion))

    1. 5.1 By Car Type

      1. 5.1.1 Hatchback

      2. 5.1.2 Sedan

      3. 5.1.3 SUV

    2. 5.2 By Propulsion

      1. 5.2.1 Internal Combustion Engine

      2. 5.2.2 Electric

    3. 5.3 By vendor Type

      1. 5.3.1 Organized

      2. 5.3.2 Unorganized

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles*

      1. 6.2.1 Gesner Auto

      2. 6.2.2 Inchcape plc.

      3. 6.2.3 ROLF

      4. 6.2.4 FRESH AUTO INGERSOLL

      5. 6.2.5 Drome

      6. 6.2.6 JSC AVTOVAZ

      7. 6.2.7 Favorit Motors

      8. 6.2.8 TrueCar Inc.

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Frequently Asked Questions

The Russia Used Car Market market is studied from 2018 - 2027.

The Russia Used Car Market is growing at a CAGR of 6% over the next 5 years.

The Russia Used Car Market is valued at 40 Billion USD in 2018.

The Russia Used Car Market is valued at 56 Billion USD in 2027.

ROLF, Fresh Auto, Inchcape Plc, Drome, Gesner Auto are the major companies operating in Russia Used Car Market.

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