According to VTB (MCX:VTBR) forecasts, about 700 thousand new cars will be sold in the Russian car market this year, which will be almost 6% higher than last year’s figure. Thus, after the fall in 2022, the segment will once again show growth.

“The past year for the domestic automotive market turned out to be unprecedented in terms of the number of challenges. With the already existing deficit, it faced the withdrawal of Western manufacturers, which entailed a rise in prices and the expected decline in sales,” the bank said in a statement. According to auto market experts, 662 thousand new passenger cars were sold in Russia last year, which is 60% lower than the result of 2021. The market leadership was retained by Lada cars, which took about 28% of sales. Kia (KS:000270) (10.5%) and Hyundai (8.6%) are next in the list of Russians’ preferences.

In 2023, according to VTB forecasts, with a favorable macroeconomic situation, we can expect a gradual adaptation of the market to new conditions, which will be influenced by a set of factors. Firstly, the demand for specific and scarce vehicles will be satisfied by parallel imports. Secondly, the segment dynamics will be positively influenced by the expansion of brands from China and the arrival of Iranian manufacturer Iran Khodr, as well as the return of manufacturers’ incentive programs. Thirdly, increased production of domestic cars will contribute to the market development.

Earlier VTB predicted growth in 2023 of the share of credit transactions in the market of new cars in Russia. According to the bank’s experts, this indicator may increase by about 6-7 p.p. and reach about 45%