Market of automobile spare parts in Russia and the Russian Far East

Automobile market situation in Russia and the Russian Far East (RFE)

For the last 10 years the quantity of passenger cars in Russia was intensively growing. The

number of cars increased by 52% from 2006 to 2016, but the growing rate significantly

decreased in 2015. According to the data analysis of AUTOSTAT Analytic Agency

(www.autostat.ru) there are 41.1 million of passenger cars in Russia on 1 July 2016. The

average age of vehicles is 12.2 years and 31% of them are older 15 years. The share of foreign

automobiles is 59%.

According to the Association of European Business (AEB, www.aebrus.ru) the total quantity of

passenger cars and light commercial vehicles sold in Russia in 2016 was 1.4 million units. This

number includes imported and locally produced vehicles. The average ratio of locally assembled

cars to all vehicles sold is 82%.

Country of origin of Russian cars

Country / Brand Share

Russian 41,0%

Japanese 22,1%Toyota 8,7%

Nissan 4,6%

Mitsubishi 2,7%

German 9,8%VW 3,4%

Opel 2,2%

Audi 1,4%

Korean 9,6%

Hyundai 3,9%

KIA 3,4%

Daewoo 1,8%

US 7,4%Chevrolet 3,8%

Ford 3,1%

Jeep 0,1%

French 4,7%Renault 3,5%

Peugeot 0,7%

Citroen 0,4%

Others 5,4%

The sales volume declined by 11 % or 176 319 units in comparison to the previous year. The

market is declining for 4 years already, but AEB believes that in 2017 the sales will go up. Total

market sales are expected to reach 1.48 million units or 4% above 2016 result.

By the information from DROM Automobile Information Portal (www.drom.ru) the total

number of passenger cars in the Russian Far East in the middle of 2016 was 1.9 million units.

The automotive market of this region mainly consists of second hand Japanese cars (more than

70%).

New cars sales in Russia in 2016 by brand

Includes passenger cars and light commercial vehicles (LCV)

# Brand Units sold %

1 Russian native brands (Lada, GAZ, UAZ) 370 947 26,02%

2 KIA 149 567 10,49%

3 Hyundai 145 254 10,19%

4 Renault 117 230 8,22%

5 Toyota 94 568 6,63%

6 VW 74 221 5,21%

7 Nissan 70 464 4,94%

8 Skoda 55 386 3,88%

9 Ford 42 528 2,98%

10 Mercedes-Benz 43 216 3,03%

11 Chevrolet 30 463 2,14%

12 BMW 27 507 1,93%

13 Lexus 24 117 1,69%

14 Mazda 21 543 1,51%

15 Audi 20 705 1,45%

16 Datsun 18 772 1,32%

17 Lifan 17 460 1,22%

18 Mitsubishi 16 769 1,18%

19 Others (less than 1% of total sales) 85 074 5,97%

TOTAL 1 425 791 100,00%

Top 25 models sold in Russia in 2016

# Model Units sold

1 Hyundai Solaris 90 380 14 Skoda Rapid 25 931

2 Lada Granta* 87 726 15 Hyundai Creta 21 929

3 KIA Rio 87 662 16 Skoda Octavia A7 21 759

4 Lada Vesta* 55 174 17 Lada Kalina* 20 982

5 VW Polo 47 702 18 Lada XRAY* 19 943

6 Renault Duster 44 001 19 UAZ Patriot* 19 381

7 Toyota RAV 4 30 603 20 KIA Sportage 19 003

8 Chevrolet Niva 29 844 21 Nissan Qashqai 18 723

9 Renault Logan 29 565 22 Nissan X-Trail 17 886

10 Lada Largus* 29 341 23 Lada Priora* 17 553

11 Renault Sandero 28 557 24 Mazda CX-5 15 790

12 Toyota Camry 28 063 25 KIA Cee'd 15 081

13 Lada 4x4* 27 274 * - native Russian manufacturer

The quantity of new cars sold in the Russian Far East in 2016 is 14 thousand units. It is less than

1% of total volume of sales in the country. The level of new cars sales comparing to other

regions is very low because this area is saturated with right-hand drive Japanese cars which

were imported from Japanese second hand automobile market. The share of such Japanese

second hand cars in the Russian Far East is 73% (1.4 million units).

Second hand cars from Japan

Automobile market in Vladivostok

Current situation on automobile spare parts market in Russia

According to automobile journal KOLESA.RU (http://www.kolesa.ru) about 50% of all cars in

Russia are more than 10 years old. It means that the demand for spare parts and service should

be very high. The estimated volume of automobile spare parts market in Russia in 2016 is 18

billion USD (including spare parts produced locally in Russia and smuggled ones).

The biggest demand in Russian market of automobile spare parts and accessories is for tires,

motor oil and car suspension parts. Sales of tires occupy 15% of all spare parts market.

Suspension parts take 10% of spare parts market and motor oil - 8% .

Main car brands in the Russian Far East region

Brand Q-ty %

Toyota 999 824 52,08%

Nissan 305 159 15,90%

Honda 148 815 7,75%

Mitsubishi 125 635 6,54%

Subaru 69 320 3,61%

Mazda 64 249 3,35%

Suzuki 63 347 3,30%

Lexus 54 604 2,84%

Infinity 12 072 0,63%

Other 76 694 4,00%

TOTAL 1 919 719 100,00%

The sales of oil filters, brake discs and pads and transmission parts make 5% of all spare parts

market and sales of electric batteries for automobiles occupy 5% of automotive parts market.

Spare parts market segmentation in Russia and the Russian Far East

Today the market of automotive spare parts imported to Russia and to the Russian Far East is

divided into the following segments:

1. New original parts.

These parts are certified and supplied by official car manufacturers like Toyota, Nissan and

others. The new original parts are used by car manufacturers, authorized service providers and

sold separately via authorized retail outlets.

Such parts are ideal for the car but the price for them is the highest one. Besides, nowadays

there are many counterfeits among those parts.

2. New non-original parts.

These parts are produced by the separate companies independent of official car manufacturers.

The parts are sold under the brand name of manufacturer but not the brand name of car. The

new non-original parts are widely sold through retail outlets and used by usual car services.

Price for such spare parts is 30-60% lower than for original one, but the quality can be low. It

does not mean that all of them are bad quality. There are many reputable manufacturers which

produce high quality parts, for example NGK, KYB, Nisshinbo etc.

However if owner installs non-original spare part in his car, the guarantee for free car service

can be voided.

The biggest part of non-original spare parts is manufactured in China and imported to Russia

from there.

3. Second-hand spare parts

Old and damaged cars are utilized in special scrap yards in Japan, USA and European countries.

Before the utilization mechanics dismantle the car and take some salable spare parts away and

export them to Russia. For example those parts are engines, transmissions, side panels,

bumpers, headlamps, generators, starters, drive gears etc.

Those spare parts are ideal for the car and the price is much lower than new ones. The quality

of such spare parts is very good because in Japan, USA and European countries the cars are

usually kept in very good technical condition.

From another side, the buyer of second hand automotive parts cannot be sure for 100% that

the part is in good condition. For example, turbo compressor or automatic gear box can be in

bad condition inside. Besides it is impossible to find such spare parts for the cars younger than

3-5 years.

Second hand car parts in Vladivostok

Second hand spare parts

Import of spare parts to Russia and the Russian Far East

The HS code for automotive spare parts is 8708. The customs duty is 5% of contract amount.

More than 95% of all spare parts import to the RFE goes in 20ft or 40ft containers through

Vladivostok and Vostochny ports in Primorsky region.

According to the information from the Russian Customs (www.customs.ru) the main statistics

of spare parts import is the following:

Import of spare parts by RUSSIA and the Russian Far East

in Jan-Sep 2016 (9 months)

'USD thousand

Total Thailand

Russia 4 094 224 19 099

Russian Far East 116 480 763

Country Amount,

thousand

USD

% Country Amount,

thousand

USD

%

Germany 640 193 15,64% India 58 271 1,42%

China 592 681 14,48% United Kingdom 53 423 1,30%

Japan 513 141 12,53% Sweden 31 667 0,77%

Korea 457 276 11,17% Hungary 29 769 0,73%

Romania 238 488 5,82% Taiwan 27 480 0,67%

USA 195 506 4,78% Austria 24 930 0,61%

Czech Republic 175 367 4,28% Thailand 19 099 0,47%

France 151 867 3,71% Ukraine 17 548 0,43%

Belarus 150 330 3,67% Netherlands 13 812 0,34%

Slovakia 121 047 2,96% Belgium 13 648 0,33%

Turkey 116 611 2,85% Canada 12 829 0,31%

Spain 109 005 2,66% Malaysia 10 731 0,26%

Poland 92 508 2,26% others 86 180 2,10%

Mexico 79 697 1,95% TOTAL 4 094 224 100,00%

Italy 61 120 1,49%

Import of spare parts by RUSSIA in Jan-Sep 2016 (9 months)

Import of spare parts by the Russian Far East

in Jan-Sep 2016 (9 months)

Country Amount,

thousand

USD

%

Japan 55 430 47,59%

China 40 897 35,11%

Korea 14 636 12,57%

Taiwan 2 340 2,01%

Thailand 763 0,66%

Germany 665 0,57%

USA 506 0,43%

Malaysia 184 0,16%

Indonesia 173 0,15%

Singapore 169 0,14%

Australia 156 0,13%

Turkey 151 0,13%

Hongkong 117 0,10%

others 293 0,25%

TOTAL 116 480 100,00%

Main groups of spare parts imported by Russia from all countries in Jan-Sep 2016 (9 months)

HS Code Product Amount, thousand USD

870829 Parts and accessories of bodies for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles (excluding bumpers and parts thereof and safety seat belts)

780 549

870840 Gear boxes and parts thereof, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

618 620

870899 Parts and accessories, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

532 968

870880 Suspension systems and parts thereof, incl. shock-absorbers, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

463 639

870830 Brakes and servo-brakes and their parts, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

429 363

870870 Road wheels and parts and accessories thereof, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

387 279

870894 Steering wheels, steering columns and steering boxes, and parts thereof, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

245 850

870850 Drive-axles with differential, whether or not provided with other transmission components, and non-driving axles, and parts thereof, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

197 095

870893 Clutches and parts thereof, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

93 727

870810 Bumpers and parts thereof for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

98 177

870891 Radiators and parts thereof, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

82 516

870892 Silencers "mufflers" and exhaust pipes, and parts thereof, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

81 936

870895 Safety airbags with inflator system and parts thereof, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles, n.e.s.

55 488

870821 Safety seat belts for motor vehicles 27 017

TOTAL 4 094 224

In the first nine months of 2015 (Jan –Sep) Russia imported spare parts for 4 000 796 thousand

USD, in the same period of 2016 total Russian import of automobile spare parts was 4 094 224

thousand USD. The growth is 2.34%.

In Jan-Sep of 2015 the total import of spare parts from Thailand was 47 510 thousand USD but

in Jan-Sep of 2016 Russia imported spare parts from Thailand for 19 099 thousand USD. The

amount declined by almost 60%. In the same time import of Chinese spare parts increased

greatly.

In Jan-Sep of 2015 the Russian Far East (RFE) import of automobile spare parts from all the

countries was 161 476 thousand USD but in the same period of 2016 the RFE imported spare

parts for 116 480 thousand USD. The volume of import decreased by 28%.

However, the volume of spare parts imported by RFE from Thailand in Jan-Sep of 2016

increased by 21% comparing to the same period of 2015 (763 thousand USD against 632

thousand USD).

Government regulation

Import of automobile spare parts is regulated by technical requirements listed in governmental

order “Safety requirements to wheeled vehicles” No.877 dated 09.12.2011.

The documents required to import spare parts are the following:

- Technical description of products

- ISO certificate

- The letter from manufacturer informing that spare parts will be used for technical

service of vehicles.

- Approval of vehicle type issued by ROSSTANDART Federal Agency of Russia

(http://www.gost.ru)

The main importers of automobile spare parts in the Russian Far East.

UNIQOM LLC spare parts and accessories importer and wholesaler (http://uniqom.ru). The

company was founded in 1995. It mainly supplies new Japanese spare parts. Head office is

located in Vladivostok. The company has 10 branches and 7 representative offices in all big

cities of Russia including Moscow and St. Petersburg. There are 550 employees in the company

at the moment.

MX Group LLC spare parts and accessories importer and wholesaler (http://mxgroup.ru). The

company supplies Japanese and Korean spare parts. Head office is located in Vladivostok.

There are branches in 12 cities of Russia including Moscow and St.Petersburg.

AUTOBIZ LLC spare parts and accessories importer and wholesaler (http://www.autobiz.ru).

The company was founded in 2000. Supplies Japanese, Korean and Chinese spare parts. Head

office is located in Vladivostok. The company has branch in Khabarovsk city.

Automekhanika LLC automobile spare parts importer, wholesaler and retailer

(http://www.automechanica.ru). The company supplies Japanese and Korean spare parts. Head

office is located in Vladivostok. The company has branch in Khabarovsk and retail shops in every

big city of the Russian Far East.

Autovladcar LLC importer, wholesaler and retailer of spare parts for Korean vehicles

(http://www.autovladcar.com). The company HQ is located in Vladivostok. The branches are in

10 cities of Russia including Moscow and St. Petersburg.

Sunrise LLC (http://sunriseparts.ru) importer, wholesaler and retailer of second-hand spare

parts in Vladivostok.

Summit Motors LLC ( http://toyota-vvo.ru) located in Vladivostok. Official dealer and service

provider of TOYOTA Motors Corporation in Primorsky Region Supplies only new and original

spare parts for Toyota cars.

Avtoritet Auto LLC (http://www.avtoritet-auto.ru) located in Vladivostok. Official dealer of

NISSAN in Primorsky Region. Supplies only new original spare parts for Nissan cars.

Avtomir Primorye LLC (http://automir-prim.ru/) located in Vladivostok. Official dealer of

Mitsubishi Motors Corporation.

Sumotori LLC (http://cars.sumotori.ru). Official dealer of Mazda, Subaru, Suzuki, KIA, Ford,

Subaru, Skoda, VW. Located in Vladivostok.

Vostok-SV LLC (http://www.hyundai-vostok.ru) official dealer of Hyundai Motor Corporation.

Hyperauto LLC (http://hyperauto.ru) supermarkets network of car parts and accessories.

Consists of 38 supermarkets in 19 cities of the Russian Far East and Siberia.

Sollers Far East LLC (http://www.sollers-auto.com) is joint Russian – Japanese company Mazda

Sollers Manufacturing. It assembles Mazda automobiles models CX-5 and Mazda6. The

company started to assemble cars in 2012. In the middle of February 2016 they produced

90000 automobiles.

Hyperauto supermarket

Automobile exhibitions in Rusasia in 2017 (www.exponet.ru)

Event Date/Location Description

Car Industry. Car Components - 2017 All-Russian Specialized Exhibition

Naberezhnye Chelny Exhibition Center EXPO-KAMA 15-17 Feb 2017

Cars Automobile accessories Special vehicles Automobile chemical goods Tuning Tires and wheels Fuels and lubricants Hoisting and attached implements Equipment for fuel stations, gas-filling stations, service stations, garages Details, key part and car components Equipment and tooling Transport and forwarding services, customs processing services Repair services Workwear Vehicle insurance Leasing

Auto World - 2017 26th International Automobile Exhibition

Saint Petersburg Sports and Show Complex 6-9 April 2017

Cars: passenger cars, buses, minibuses, special vehicles, commercial vehicles, trailers, motor homes Auto tuning, accessories for tuning Car spare parts and automotive components

Car service and repair equipment Car accessories: burglar alarms, anti-theft systems, navigation systems Materials: oils, automobile chemistry, varnishes, automobile cosmetics, lubricants Tires, wheels Financial services: car loans, car insurance, leasing

Motors – 2017 1st Interregional Exhibition

Sevastopol (Crimea) Shopping center Musson 28-29 April 2017

Automobile chemistry, auto parts, accessories, car care products, auto electronics Insurance companies Drones, Segway (gyro scooters), go-karts, electric cars, electric scooters, ATVs, buggies Children's large-sized cars, RC equipment Equipment to diagnose and service the vehicle systems Electric cars

Ural Motor Show - 2017. Commercial Vehicles International Specialized Exhibition

Chelyabinsk Ice Arena "Tractor" 11-13 May 2017

Cars and trucks Commercial vehicles Automotive technologies Spare parts, car care products, tools, accessories Security systems Customizing, auto design, motor racing Fuels and lubricants Banks, insurance and leasing companies

TRANSPORT of Far East Region - 2017. Special Equipment, Automobiles, Transportation, Service Multiindustrial Exhibition

Khabarovsk Track and Field Athletics Manege of the Stadium naimed after V.I.Lenin 21-24 September 2017

All types of transport: railway, water, air and road Machine building. Automotive Services in transport: transport and logistics services. Insurance. A car loan. Driving school. Service stations, Gas stations. Transportation Special equipment and machines for industrial complex. Communal equipment. Equipment for sports and recreation: auto, moto, bicycle tech; boats and yachts; snowmobiles; trailers Vehicles: spare parts, tires, accessories, car chemicals, lubricants Roads, transport interchanges. Infrastructure Monitoring and transport safety. Automation of technological processes of transport equipment. Glonass system. The tachographs. Auto safety. Environmental safety: electric car, car gas; alternative sources of energy in transport

Avtotech Krasnodar - 2017 Exhibition of Auto Spare Parts, Equipment and Tools, Auto Components, Trucks and Passenger Transport

Krasnodar Exhibition complex "Expograd Yug" 13-15 Oct 2017

Auto parts and automotive components Automotive chemicals, car cosmetics Equipment and tools for auto service Auto electrician and electronics Freight and passenger transport, special machinery Accessories

Conclusion

The market of automobile spare parts in the Russian Far East differs significantly from spare

parts market of central Russia. One of the main features of the Far Eastern Region is that there

are more than 90% of all cars belong to Japanese brands and another feature is that about ¾ of

all cars are second-hand right-hand drive cars imported from Japan.

Due to that reason, the most required spare parts in the Russian Far East are parts for Japanese

cars.

Recently the purchasing ability of Russian people has decreased significantly due to the

economic recession and currency devaluation. For that reason there is high demand for not

expensive spare parts for Japanese cars.

The original spare parts imported from Japan are now very expensive for common Russian

buyer. The second hand spare parts from Japan also became quite expensive. The best

alternative instead of original Japanese parts is non-original spare parts of good quality from

China and Taiwan.

If manufacturers from Thailand can offer spare parts of good quality and competitive price it is

good time to enter the market of this kind of goods in the Far East of Russia at the moment.