The number of luxury cars in Russia increased by 22% last year, despite the exodus of Western automakers due to sanctions, according to a report by business daily RBK. The analysis of federal tax audit data conducted by FinExpertiza consultancy revealed that the “luxury tax” charged on cars with a price of 10 million rubles ($100,000) or more increased by 31% last year to 3.34 billion rubles ($33.5 million).
The data showed that individual owners accounted for around 12,800 luxury cars in 2022, while approximately 7,000 vehicles were registered by enterprises and organizations. Moscow and its surrounding region accounted for around half of luxury vehicle purchases in Russia, with St. Petersburg following closely behind. Interestingly, at least 76 Russian regions registered an increase in the number of luxury vehicles last year, with the republics of Kalmykia, Buryatia, Dagestan, and Amur Region recording the biggest percentage rises.
Despite the sanctions imposed by the US, EU, and Japan on the export of luxury cars and other goods to Russia following Moscow’s military operation in Ukraine, the demand for expensive vehicles remains stable in the country. The surge in luxury vehicle sales in Russia cannot be attributed to the Covid-19 pandemic or the Western sanctions that restricted Russians’ access to the luxury segment, according to analysts at FinExpertiza. They believe that the luxury segment is less price-dependent than the mass market, which explains the steady demand for high-end vehicles.
Since the imposition of sanctions in March 2022, neighboring countries such as Georgia, Armenia, Kazakhstan, and Finland have been accused of enabling the re-export of high-end automobiles into Russia. Despite these measures, the number of luxury cars in the country continues to rise.
The growth in luxury vehicle sales in Russia is a significant development, especially considering the decline in Western automakers’ presence due to the sanctions. This suggests that consumers in Russia have a strong appetite for luxury cars and are willing to invest in them despite the challenges.
Overall, the data demonstrates that the Russian luxury car market is thriving, with an increase of 22% in the number of vehicles priced at $100,000 or more last year. This growth is attributed to the steady demand for expensive vehicles in Russia, which is less price-dependent than the mass market. Additionally, the rise in luxury car purchases in various regions across the country highlights the broad appeal of high-end automobiles. Despite the restrictions imposed by Western sanctions, the market continues to expand.