With Chinese brands reaping gains and opportunities from Western embargo, the Russian economy is shrinking. Although with parallel imports Russians could still hand onto premium brands, consumers are having tough times. Russian smartphone sales plunged by 33% last year to only 21 million. Then, Europe’s smartphone market plunged 20%. Autostat reported that Russia’s car market fare was the worst during the embargo. It fell almost 6% in 2022 in comparison to the last 2022.
Tatiana Hristova, an associate director of automotive research at S&P Global Mobility argued that Russian consumers put hold on big items. This is probably because they are aware of potential future waves of military mobilization. Thus, their current decision is on hold, making the economy shrink. However, the analysts start to question whether the Russian market has changed forever. Stryjak believes that Apple and Samsung might rebuild their operations in Russia, if the war ends. Thus, these brands could recapture their smartphone sales.
It is somehow clear that some firms plan to return and gain their interests in the country. Renault for instance, after deciding to flee, said that the firm left the door open to come back. The company would return with an option to buy back its interest in Lada through 2028. Although, international brands could return. Chinese players could still maintain their position. Because it takes so long to rebuild supply chains.
There is also uncertainty on when the war would end. Le at Sino Auto Insights argued that both Russian brands and Chinese brands stay in the market as the real players. These players would likely become permanent players.
