Russia's Automotive Market in 2023: Structural Transformation

A FIT SERVICE and Gruzdev-Analyze study of 2023: record used-car sales, a historically short ownership period, an aging fleet, and the real outlook for Chinese brands and EVs.

This report summarizes a comprehensive study of Russia's automotive market conducted by the international automotive service network FIT SERVICE in cooperation with the analytics firm Gruzdev-Analyze. The study covers the first nine months of 2023, and its findings were presented at an online industry conference.

The analysis focuses on:

new and used vehicle sales;
changes in vehicle ownership behavior;
the contraction and aging of the active vehicle fleet;
the brand structure of the fleet;
medium-term prospects for Chinese brands and electric vehicles (EVs).

Key Market Trends (Executive Summary)

According to the study:

the used car market reached record volumes;
the average vehicle ownership period declined sharply;
the active vehicle fleet continues to shrink while aging rapidly;
Chinese brands and electric vehicles will have limited short- and medium-term impact on the overall fleet structure.

New Vehicle Sales in Russia

New vehicle: a vehicle registered for the first time in the country.

Key findings:

New car sales increased steadily throughout 2023.
Since May, and especially from July onward, monthly sales stabilized at 98,000 to 109,000 units.
Summer sales remain below the strong pre-pandemic levels of 2019 but are close to those recorded in 2021.
August and September results indicate an active phase of market recovery.

Role of Parallel Imports

Parallel import: the import of vehicles without the involvement of the brand's official distributor.

Parallel imports account for only about 13% of all new vehicle registrations.
The majority of new vehicles are either produced domestically or imported through direct supply channels.

"In the structure of new vehicle sales, parallel imports account for a relatively small share. Of all new vehicle registrations, only 13% are vehicles imported through parallel import schemes. This suggests that the majority of new vehicles are either produced domestically or imported directly." (Alexander Gruzdev, head of Gruzdev-Analyze)

Used Car Market: Record Growth

Used car (pre-owned vehicle): a vehicle that has previously been registered and operated.

Market indicators:

Over 5 million used vehicles were sold in Russia during the first nine months of 2023.
Year-on-year growth reached 27%.
Total vehicle sales (new and used combined) are forecast to reach 7.5 million units by year-end.

Increasing Role of Dealers

Many automotive dealers have shifted their business models toward used vehicles.
This strategic reorientation has helped dealer groups remain financially viable amid constrained new vehicle supply.

"An important development is the growing role of dealers in the used car market. Many dealerships have reoriented their business models toward used vehicles. This transformation has allowed dealer groups to remain financially viable." (Alexander Gruzdev)

Declining Vehicle Ownership Period

Vehicle ownership period: the average time a vehicle remains with one owner before resale.

The surge in demand for used vehicles has affected several other market indicators. Contrary to the expectations of many analysts, the average ownership period has declined significantly.

Key data:

Average ownership period in 2023: 4.6 years.
Previous year (2022): 5.7 years.
Annual decline: 19%, reaching a historical low.

Drivers of change:

record levels of vehicle resales;
increased interregional vehicle movement;
growing demand for pre-purchase vehicle inspections.

"This year, we are seeing a record number of resales, which has resulted in a historically low average ownership period." (Alexander Gruzdev)

"At our service stations, demand for pre-purchase inspections has increased sharply in 2023. We also observe growing vehicle migration between cities, with cars being resold not only locally but also across neighboring and distant regions." (Tatiana Ovchinnikova, Director at FIT SERVICE)

Active Vehicle Fleet: Contraction and Aging

Active vehicle fleet: vehicles currently in operation.

Russia's active vehicle fleet has been contracting for the second consecutive year.

Fleet dynamics:

2022: down 822,000 vehicles (2.3%).
2023: down a further 395,000 vehicles (1.1%).
Estimated fleet size by the end of 2023: approximately 34.3 million vehicles.

"Although new vehicle sales in 2023 exceeded early-year forecasts, they have not compensated for the accelerated exit of vehicles from the fleet. The total number of cars on the road continues to decline." (Alexander Gruzdev)

Fleet Aging

Average fleet age in 2023: 11.2 years, up from 10.9 years in 2022.
Average age of vehicles serviced within the FIT SERVICE network: 12.4 years in 2023, up from 11.9 years in 2022 and 10.7 years in 2017.
Rapid aging increases demand for maintenance and repair services.

"At the same time, vehicles are being retired later. The average age of the fleet rose sharply in 2023. The fleet is aging rapidly, and the faster it ages, the greater the demand for repair and maintenance." (Alexander Gruzdev)

Vehicle Service Life Is Increasing

Active service life: the total period a vehicle remains operational before final retirement.

Average service life in 2023: 27 years.
The indicator was stable at about 24 years during 2019-2021.
Its growth since 2022 reflects slower vehicle retirement from the fleet.

Customer structure, share of owners of vehicles older than 20 years:

2019: 9%.
2023 (first nine months): 14%.

Consumer behavior indicates increased cost sensitivity and a stronger focus on extending vehicle lifespan.

"The share of customers owning vehicles older than 20 years is increasing every year. The older the fleet, the higher the volume of repairs. We clearly see that customers are becoming more cost-conscious and are trying to extend the life of their vehicles, as they are uncertain about what they will be able to replace them with." (Tatiana Ovchinnikova)

Chinese Brands and Electric Vehicles: Market Reality

Chinese Automotive Brands

Share of Chinese brands in Russia's total vehicle fleet: about 2%.
Share among FIT SERVICE customers: 2.5%.
Even at current sales rates, significant fleet penetration will take many years.

Brand structure:

Russian brands dominate the fleet and will continue to do so in the near term.
Japanese brands remain the largest foreign group, with a share of about 40.5% among FIT SERVICE customers, just as in 2019.

"The assumption that Chinese vehicles and electric cars will soon occupy significant shares of Russia's vehicle fleet is incorrect. Currently, Chinese brands account for only about 2% of the fleet. Even at current sales levels, it will take many years for this share to grow meaningfully." (Alexander Gruzdev)

Service characteristics:

Typical service intervals for Chinese vehicles are relatively short: 10,000 to 15,000 km.
As a result, within two to three years of ownership Chinese vehicles are expected to generate more service visits on average than Korean or Japanese brands.
The average dealer loyalty period among owners of Chinese vehicles is 1 year and 10 months; after that, visits to independent service centers exceed dealer visits.
By the third year of ownership, 86% of service visits are made to independent workshops.

Electric Vehicles (EVs)

Electric vehicle (EV): a vehicle powered fully by electric motors.

EVs account for less than 1% of Russia's vehicle fleet.
No significant increase in the EV share of sales is expected over the next three years.
Large-scale demand for EV servicing remains a long-term prospect, more distant even than demand for servicing Chinese vehicles.

Overall Conclusions

The Russian automotive market in 2023 is driven primarily by used vehicle transactions.
Ownership periods are shortening despite longer vehicle service life.
The active fleet continues to shrink and age, boosting demand for repair services.
Chinese brands and EVs will not structurally reshape the fleet in the near term.
Independent service networks are gaining importance as vehicles age and dealer loyalty declines.

About Gruzdev-Analyze

Gruzdev-Analyze is an international marketing and analytics company with over 20 years of research experience, including more than 15 years in the automotive sector. Its clients include global automakers, component manufacturers, service networks, and IT companies.