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After reaching a production peak in October, Russia's automobile production experienced a slight decline in November, which had a negative impact on the steel PT490M steel rolling supply in the automotive industry. As the economic situation continues to deteriorate, the industry outlook for 2025 is full of uncertainty.
Data shows that in November, Russia produced 80400 passenger cars (a decrease of 12% compared to the previous month), 17400 trucks (a decrease of 10% compared to the previous month), and 1300 buses (a year-on-year increase of 2%). At the same time, the supply of steel rolling has also decreased. In November, the total amount of steel rolling supplied to automobile manufacturers was about 78000 tons (excluding imports and second-hand market purchases), a decrease of 7% compared to the previous month. Among them, the supply of sheet metal decreased by 10% to 60000 tons, while the sales of long materials increased by 11% to over 13000 tons.
From January to November 2024, the total production of the Russian automotive industry was 679000 passenger cars (a year-on-year increase of 39%), 178000 trucks (a 10% increase), and 13700 buses (a 12% increase). During the same period, the total PT490M steel supply of steel rolling was 974000 tons (a year-on-year decrease of 4%), including 171000 tons of long steel (a decrease of 14%) and 803000 tons of sheet metal (a decrease of 1%).
Looking ahead, the industry situation is becoming increasingly severe, and the possibility of continuing this year's positive trend is decreasing. Anton Alikhanov, the Minister of Industry and Trade of Russia, stated through the International News Agency that "2025 will be even more difficult for the automotive market and manufacturers. External sanctions pressure continues to intensify, and the industry needs to adapt to the rapidly changing macroeconomic environment. By the end of this year, we can see signs of gradually slowing demand, shrinking car loan markets, and decreased consumer activity
In addition, according to the prediction of KAMAZ, a well-known heavy truck manufacturer in Russia, truck sales may decrease by 23% in 2025. Mikhail Matasov, Deputy General Manager of Kamas, told TASS News Agency, "Currently, we estimate market sales to be around 85000 vehicles, compared to 110000 vehicles in 2024. We believe this number is already an optimistic forecast." Russian car manufacturing company AvtoVAZ has previously stated that due to weak demand, the company may adjust its production plan for next year.
It is worth noting that the market share of Chinese cars in the Russian market continues to rise, putting pressure on local manufacturers. It is expected that by the end of 2024, China's automobile market share will reach 68%, further increasing from 58% at the end of 2023. At the same time, the Russian government is planning to modify the SPIC (Special Investment Contract) policy to encourage companies that do not meet localization requirements to expand production through compensation for rebates. This move may further attract investment from Chinese companies, but local PT490M steel Russian manufacturers have expressed concerns that this policy may allow foreign companies to gain more market share. As an alternative, it is suggested to provide policy support only to companies with local beneficiaries in Russia.
