The Russian car market is facing an interesting situation: despite the initial boom, sales of Chinese cars are falling sharply. Dealers' warehouses are overflowing with unsold models, including those from 2023, the number of which reaches about 200 thousand. But what exactly led to this decline in demand?
The main reason is the loss of their main advantage: availability and affordability. Chinese cars, which were once attractive due to their lower price, are no longer so profitable. Rising recycling fees, high taxes and increased interest rates on loans have significantly inflated their prices.
The problem with residual value
A key factor repelling buyers is the questionable residual value of Chinese cars. While used Japanese and Korean brands such as Toyota and Kia retain their value and sell quickly on the secondary market, their Chinese counterparts lose up to 40% of their value in just three years. In addition, selling a Chinese car on the secondary market takes an average of 180 days, which is significantly longer than the time required for other brands.
Discounts make the situation worse
Paradoxically, the huge discounts on new Chinese cars actually make the problem worse. Dealers are noticing that the price difference between a new and a used car has become so small that buying a used model no longer makes sense. For almost the same money, buyers can afford a brand new car, which is logically a more attractive option.
Although these discounts temporarily stimulate demand for new cars, they undermine confidence in brands. Consumers are beginning to doubt the long-term value and stability of Chinese cars on the market. Experts warn that if the problem of residual value is not resolved, the crisis could lead to the withdrawal of a number of Chinese brands from the Russian market.
After all, affordability and good residual value are crucial for consumers. Chinese cars in Russia face a serious challenge to restore these two key advantages in order to regain the trust of buyers.