Automotive tires (Russian market)

Automotive market of Russia

Main article: Automotive market of Russia

2023

Reduction in the production of tires and tires for agricultural machinery by 20% to 1.08 million units

In 2023, approximately 1.08 million tires and tires for agricultural machinery were produced in Russia. This is 20% less than the previous year, when the volume of output was 1.35 million units. Such data are provided in the BusinesStat report, published on May 23, 2024.

It is noted that the production of tires and tires for agricultural machinery in the Russian Federation grew in 2020-2021 amid increased demand for products in the domestic and foreign markets. So, in 2020, about 1.65 million products were manufactured, which is 9.8% more compared to 2019 (1.51 million units). In 2021, the increase was 1.7% - up to 1.68 million units. However, a sharp decline followed due to forced downtime and restrictions on the activities of large factories in light of sanctions. In 2022, production decreased by 19.7% on an annualized basis - to 1.35 million units. At the end of 2023, the production of tires and tires for agricultural machinery decreased by 28.3% compared to 2019.

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BusinesStat

BusinesStat materials say that a strong fire at the largest domestic tire enterprise Nortek LLC in the Altai Territory in December 2022 had a significant negative impact on the Russian market. As a result of the incident, the plant did not function for several months, and as of April 2023, production volumes amounted to only 60% of the previous indicators.

Another negative factor was that the American company Titan International in the spring of 2022 stopped investing in its Russian tire production - Voltyr-Prom JSC. This company is one of the leading players in the industry under consideration, along with PJSC Nizhnekamskshina and JSC Petroshina. At the same time, as noted by the Ministry of Industry and Trade, the production capabilities of Voltire-Prom JSC and Nortek LLC (excluding a decrease in production due to fire) make it possible to fully meet the needs of the domestic market in tires and tires for agricultural machinery.^[1]

Passenger car tires market growth by 16% to 45.7 million units

The volume of the Russian market for tires for passenger cars in 2023 by 16% compared to 2022 and amounted to 45.7 million units. Such data, the general director of the tire holding Cordiant"" Vadim Volodin cited in April 2024.

We are talking about sales of car tires of all manufacturers, and not only under the brand name "Cordiant." As Kommersant writes with reference to Volodin's presentation, the volume of sales of tires for trucks in Russia in 2023 reached 8.1 million units, an increase of 12% compared to the previous year.

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Unsplash

According to the head of Cordiant, in the premium segment of tires in 2023 there was a decline due to sanctions and supply problems. Vadim Volodin also added that in Russia "practically collapsed" deliveries for the primary equipment due to the suspension of work at international automobile plants.

Against the background of sanctions against Russia, which were introduced by the United States and Europe after the start of the Russian military special operation in Ukraine, foreign companies manufacturers began to get rid of Russian business. So, in March 2023, Finnish Nokian Tyres sold Tatneft a plant in Vsevolozhsk, Leningrad Region, with a capacity of 17 million tires per year. The transaction amount amounted to 400 million euros. At the same time, the French Michelin sold its plant in the Moscow Region to the Power International Tires distributor. In May 2023, S8 CapitalArmen Sargsyan's group bought the German Continental plant (4 million tires a year), and in December of the same - the Bridgestone plant in Ulyanovsk.

As Sergei Burgazliev, an independent consultant on the automotive industry, told Vedomosti, in 2023, in the face of the cessation of production by world brands, a lot of Chinese tires were brought to Russia, as a result of which an excess of goods was formed on the market. According to the expert, in 2024, imports may be reduced due to the restart of factories in the Russian Federation.^[2]

Tire sales growth by 15% to 55 million units

In 2023, 55 million tires for all types of vehicles were sold in Russia, which is 15% more than a year earlier. This is stated in a study by the national digital marking system "Honest Sign," which was published in February 2024.

As Vedomosti writes with reference to this report, the growth of the automotive tire market in 2023 is due to the fact that the comparison is with the low volume of 2022. Then the sellers raised prices, and the buyers postponed the purchase of new tires, explained the representative of the CRPT, the operator of the Honest Sign system.

It is also noted that the rise of the Russian tire market in 2023 is provided exclusively by the supply of imported products. According to Rosstat, tire production within Russia continued to decline in 2023. The production of tires for passenger cars in 2023 decreased by 11.5%, to 30.4 million units, and tires for agricultural machinery - by 20%, to 1.1 million units. Only the production of tires for freight transport and buses increased slightly - by 1.9% in 2023 compared to the volume of one year ago. However, their volumes are small (6.5 million units) and cannot block the fall in the segment of passenger cars.

According to the results of 2023, local tire production was distributed as follows: 75% - for cars, 13% - for trucks, 9% - light-duty tires for medium-tonnage vehicles and buses. The remaining categories accounted for less than a million units of production produced in Russia.

In 2023, about 12 million tires were produced in the Russian Federation for the summer season, another 12 million are winter studded tires. Most of the imported tires for cars are summer (10.2 million units).

According to Honest Sign, in 2023 the average cost of a passenger tire was 5% lower than in 2022, and amounted to 6,142 rubles. Freight, on the contrary, rose in price by 5% to 24.2 thousand rubles. The average cost of tires for agricultural machinery remained at about the level of 2022 - 14.6 thousand rubles.^[3]

2022: Car tire sales declined 14.9% to 35.1 million units

In 2022, 35.1 million car tires were sold in Russia, which is 14.9% less than a year earlier. This is evidenced by the data of the "Review on the commercial category of the tire," prepared by the CRPT (operator of the Honest Sign system), published in March 2023.

According to the study referred to by Kommersant, in total in 2022 42.7 million tires were manufactured in the Russian Federation, mainly summer (14.5 million) and winter studded (11.3 million). On average, the cost of a set of tires increased by 3%. The average price of tires for passenger cars for the year rose by 20.5%, to 6.4 thousand rubles. Tire exports from Russia in 2022 fell by 18.2%, to almost 12 million units. Of these, about 9.5 million are for cars, about 2 million are for trucks.

35.1 million car tires sold in 2022

At the same time, it is reported that sales of tires for passenger cars increased by 3.3% in 2022. However, according to analysts, this may be due to the fears of drivers about the termination of supplies, as a result of which many preferred to buy for future use. This trend, according to Sergey Udalov from Avtostat, is characteristic of the retail segment. At the same time, a significant reduction in the premium segment is unlikely to have occurred, Mr. Udalov believes, admitting that some of the customers could, due to rising prices, go down to the segment lower or postpone the replacement for the season.

By the end of 2022, almost 15 million tires were delivered to organizations in Russia, which is 6.1% less than a year earlier. Here, mainly shipments fell on passenger (almost 7 million) and truck tires (5.5 million). If we take into account the number of cars and trucks produced in the Russian Federation, then, according to the newspaper's calculations, more than 30 million tires could be used for secondary equipment. Nokian Tyres told the publication that in 2022 the premium segment of tires in the Russian Federation decreased amid falling demand.^[4]

2021: The Russian automotive tire market grew by 20%, to 40.7 million units

According to Michelin, the volume of the Russian secondary tire market in 2021 reached 40.7 million units, an increase of almost 20% compared to 2020. Nokian Tyres estimated sales of such products for 2021 at 40.5 million units. Such data, citing these manufacturers, were cited by Kommersant on February 10, 2022.

According to estimates, which the Ministry of Industry and Trade newspaper also cites, tire consumption in 2021 increased by 8% (taking into account both primary and secondary configuration) and reached 59.4 million units. Export supplies increased by 4% (31.3 million tires), imports - by 1% (23.2 million tires), and based on this, the domestic market for the year in the department was estimated at 51.3 million tires.

The Russian car tire market grew by 20% in 2021, to 40.7 million units

Bridgestone also pointed to the growth of the tire market in 2021. In particular, in the segment of passenger cars, demand was fueled by the fact that "more and more people preferred traveling by car."

The head of Nokian Tires in Russia, Andrei Pantyukhov, said that at the end of 2021, retail prices for car tires in Russia increased by an average of 25%. According to him, such a significant rise in price is associated with an increase in prices for raw materials and an increase in logistics costs, which influenced both tire concerns with local production in Russia and companies producing their products in Asia.

The executive director of the Association of Tire Manufacturers Nadezhda Churmeeva says that in 2021 the market only partially restored the losses of the first year of the COVID-19 coronavirus pandemic, when lockdown and regional restrictions fell on seasonal sales peaks in the tire market in spring and autumn.

Bridgestone noted that in 2021 there were problems with the availability of imported products and a shortage of the most popular models and sizes, which is due to the consequences of unstable production processes in some factories and problems with the availability of containers necessary for sea transportation.^[5]

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