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Car Dealers Offer Discounts and Savings Amid Changing Car Market Trends

Photo: Sergey Bulkin / NEWS.ru / TASS

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More recently, in January – February, dealers sought to shake up overstocked warehouses, and ad aggregators recorded a decrease in prices for passenger cars by 1–3%. Now, Fontanka is convinced, almost every auto center offers “discounts,” sometimes reaching up to 10%.

However, most of these “discounts” are nothing more than a marketing ploy, the expert explained. Spring for the car market is traditionally the hottest time of sales. The cancellation of parallel imports, which is only three weeks away, tickles your nerves and forces you to rush into purchasing. So those who expected to save money on buying a car risk being late.

Over the two winter months of 2024, the car market grew by 70%: in January-February, compared to last year, 218.9 thousand new cars were sold. The fact that the high season had already started was clear from the results of car sales in February, when the car market was 30% ahead of January figures with sales of 104 thousand cars. The pathos is somewhat reduced by the low base effect. A year ago there was absolutely nothing to sell.

Severe shortages at the end of 2022 and the first half of 2023 created a “seller’s market.” The demand deferred during this time has created a situation in which buyers have already accepted that the Western brands they are used to are no longer available (or their prices have increased multiple, leaving the “comfort zone”). They were replaced by “Chinese”, which took time to get used to. But we still had to come to terms with the fact that something with an unpronounceable name now costs even more than the “Germans” and “Koreans” (who, however, were assembled in Russia).

And then people flocked to the salons, buying everything, without looking back at the sky-high interest rates on loans and their fraudulent conditions. Hence the increase in sales. And a situation in which, upon coming to the showroom, the buyer learned that “his” car was even more expensive than in the advertisement. And he took it anyway. This is how the car market played out during the long period of coma.

However, at the same time as sales increased, the market came into equilibrium. Gradually, the warehouses of car dealers were filled with new cars, and the buyer became more discerning and regained his former pre-crisis self-confidence and arrogance in dialogue with the sales manager. And again he started talking about discounts and gifts, and the salons were forced to meet him halfway.

“Changan Center Mega Auto”, which is located on the site of a Nissan car dealer, did not publish any announcements about discounts on its website, but if you talk to the manager of the sales department, you can find out a lot of interesting things. For example, according to an employee, Changan Alsvin, prices for which on the website start from 1.570 million rubles, can be purchased much cheaper: the discount can be as much as 10%.

— If you buy on credit, we can approach 1.4 million rubles, and even 1.3 — there have been such precedents. I don’t want to waste words, but I can say for sure that the car will be cheaper than 1.5 million, but I don’t know how much exactly. For cash, you can also play with the price, but not to such an extent. In general, the price of 1.4 million is achievable, they promised at the salon.

There are “interesting offers” for loans, managers say: “Our programs are subsidized by Changan itself, and the rates will be much lower than at the Central Bank, we have from 5 to 11%. Consumer loans from Sberbank are offered at 20% interest.” However, price loyalty to the first customer who calls on the phone has nothing to do with the oversupply of Chinese cars on the market.

“We can give you a discount to make it more interesting for you to buy a car,” they modestly assure you.

On the website of the Autostyle dealership, which sells Exeed, Geely, Chery, Omoda and other various Chinese, there is a banner offering to buy cars “at a profit.” This doesn’t mean a “discount”, but it seems like you also have to pay less money. For Omoda, this amount is 719 thousand rubles. You shouldn’t be happy that the Omoda S5 sedan, which is sold for 1.759 million rubles, can be purchased for just over a million.

– On the website there are prices with all possible options – credit, trade-in. Without them, the Life package will cost about 2.1 million, the showroom explained.

— The other day I read that dealers have an oversupply of cars. So do you offer good discounts?

— This is true, including due to the fact that we offer purchases on credit and trade-in. They’ll give you 150 thousand for cash,” the sales manager promised.

In relation to Omoda S5 Life, even a 150 thousand rubles discount is a good 7.14%.

The Mega Auto dealership is offering a “record price reduction” until March 15, promising benefits of up to 1 million rubles. That is, a minimally equipped Geely Emgrand, the seller explains, can be purchased for 1.7 million rubles when taking into account purchases on credit and trade-in, or for 1.85–1.9 million when paying in cash. The starting price for the car is not indicated on the website, but the seller names it: from 2 to 2.5 million rubles. That is, just like that, right away, the seller discounts at least 5% from the initial price.

As the sales department explained, the supply has nothing to do with the overstocking of warehouses.

— This applies, rather, to other Chinese dealers. Our supplies are not so large; after all, Geely is a more niche product than other cars from China. It’s just that there is a warehouse of cars that were brought to us, they need to be sold, so we are ready to offer a good price,” the center explained.

In general, the company said, the price of a car is not taken out of thin air – sellers work in the conditions that the importer allows. And an increase in car prices in the foreseeable future seems more plausible than a decrease.

“This may be possible, this has already happened – prices rose all last summer, rates rose, but we are trying to meet people halfway,” they say at Mega Auto.

At the Rolf dealership, the relevance of the price reduction trend reported by aggregators was confirmed to Fontanka. However, they noted that the trend was relevant in January – the first half of February.

“Since the second half of February, in view of the innovations of the Ministry of Industry and Trade, we have certain expectations of an increase in car prices, so we believe that it makes no sense to make discounts now,” explained Nikolai Ivanov, director of the sales department of new cars at Rolf.

Here, the innovations of the Ministry of Industry and Trade mean an increase in the recycling collection rate due to additional customs charges. First of all, cars imported into Russia through parallel imports through Central Asia will become more expensive.

— The anticipation of these changes provoked an increase in prices. Dealers began to raise prices in the second half of February due to the corresponding actions of suppliers, said Nikolai Ivanov.

As the company noted, cars will rise in price by about 12–15%.

— The difference in price between official deliveries and parallel ones depends on a large number of factors. On average, it can reach 500–700 thousand rubles for a premium car,” Rolf told Fontanka.

The official Haval dealer in St. Petersburg, “Avtoprodix,” offers to purchase a Haval Jolion “with a profit” of 100 thousand rubles, information is available on the “Special offers” tab. The offer concerns a car in the Elit configuration; on the website, prices for it start from 2.299 million rubles.

“100 thousand rubles is for cars of 2023, pre-restyling, there is no this support for restyling,” the center explains.

There is no overstocking of warehouses, they say in the showroom, the demand is good, and a discount of almost three percent is offered only because the model has an updated body. And no matter how flexible they approach pricing here, influencing the buyer’s favor with gifts, they are also talking about a price increase coming after April 1.

As the owner of one of the largest dealership centers in St. Petersburg told Fontanka, the car market is changing very dynamically, and the trends that were relevant for the end of the year have now lost force.

— At the end of the year there really was a repacking, and importers introduced a lot of support, sometimes they reached 10 percent or more. As a rule, marketing ones – when buying a car on credit or when giving a car in for a trade-in. There are also direct discounts, but not for everyone. The dealer can also influence the price, but only in the range of about 2-4 percent. Now the situation is the opposite: it’s high season for the auto business and demand is high, the refilling stage has already been passed,” explained the publication’s interlocutor. — The cost and closure of parallel imports from April 1 will affect. They also say that those cars that were purchased before April 1 will also be charged additional underpayments for customs duties; the law allows this. Everyone is rushing to make purchases before this date.

Natalya Vyazovkina, Fontanka.ru

Photo: Sergey Bulkin / NEWS.ru / TASS

2024-03-11 16:15:22
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