BCG: Russia’s sales of new cars, LCVs to drop by 25–37% in 2020

MOSCOW, Apr 21 (PRIME) – Russia’s sales of new cars and light commercial vehicles (LCVs) will drop by 25–37% on the year in 2020 to 1.3–1.1 million vehicles due to the coronavirus pandemic, Boston Consulting Group (BCG) said in a report late on Monday.

The forecast says that Russian sales will contract by 110,000–118,000 vehicles in April, which will lead to a 25–37% slump in the year. Even under the optimistic scenario the sales fall by 19% on the year to 1.4 million in 2020, while in the worst-case scenario it would plummet by 48% to 900,000 vehicles this year.

The most probable scenario for 2021 is contraction in sales of cars by 12–18%, with a possible decrease ranging from 3% to 31% depending on the scenario.

Combined sales of cars in Europe, China, and the U.S. may shrink by 10–16% to 55.9–51.8 million vehicles in 2020 in the best case scenario and by 22–38% to 48.2–38.2 million in the worst scenario, the agency said.

Eduard Cherkin, director of the automotive department in BCG CIS, said that the current crisis is a unique opportunity for Russian carmakers to catch up with the foreign car giants.

“The headquarters of foreign car producers are trying to solve problems at the largest markets of the world and paying less attention to Russia at the moment. We have to use this window to prepare for an exit out of the crisis and bring new competitive products to the market fast by ensuring servicing and scaling of sales more efficiently,” he said.

It is time to introduce new commercial models of operations, new lifecycle contracts for commercial machines, operational leasing, new subscription models for rent, and so on. The window for exports is also opening up due to the ruble devaluation, and car producers should think about forcing it when the borders are reopened, he added.

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