Expert explains Lada sales decline by the exhaustion of incentive program effects

Lada sales decline after a period of incentives

Sales of AvtoVAZ's popular models have been affected by the rising prices of Russian cars and a shrinking pool of buyers eligible for state support programs. This assessment was given to Pravda.Ru by LEM Solution expert Evgeny Ladushkin, as reported by Gazeta.Ru. He described what is happening as a natural market correction following a period of active demand stimulation.

Competition from the secondary market

According to Ladushkin, the earlier interest in the Granta and Vesta was largely sustained by incentive programs: many citizens eligible for subsidies have already purchased cars, and dealers now have to attract buyers on standard terms. In this situation, Lada vehicles compete not only with new cars of other brands but also with vehicles on the secondary market. Without state support, buyers compare options more carefully: according to the expert, for about 1.5 million rubles one can choose either a new Granta in a mid-level trim or a used Chinese car with an automatic transmission that comes with a warranty on its main components and assemblies, while differences in equipment and comfort may tip the choice in favor of the foreign-made car.

Assessment of the situation

Ladushkin does not consider what is happening a failure of AvtoVAZ's strategy: demand, in his words, is influenced by seasonal factors and the terms of government programs, and changes to or an expansion of preferential lending rules could support sales. He characterized the current situation as an ordinary market process. Note that this is the assessment of a single expert, not official sales data from AvtoVAZ; no specific figures for the decline are given in the publication.