The cost of car ownership
in Russia
Annual PwC Survey
2016 edition
Taxes and duties:
Fuel expenses:
the product of the average
kilometres travelled by fuel
consumption and price of a litre
of fuel (survey data use figures
for gasoline engines)
vehicle registration with the
State Road Traffic Safety
Inspectorate, transport tax,
luxury tax (for cars priced at
over RUB 3 million)
Insurance:
Стоимость страхования
the cost of Compulsory Motor
КАСКО по состоянию
Third-Party Liability (CMTPL,
КАСКО
на январь
or OSAGO in Russian)
and 2016 г. снизилась
Comprehensive Cover
(CASCO выражении в
в денежном
in Russian) insurance
policies
среднем
на 23 % по всем
(for Moscow and other
анализируемым
классам
major cities)
23 %
Loans:
Interest on
a three-year loan
(50% down payment)
The cost of car ownership
Planned maintenance:
17 %
Снижение ставок по data provided by dealers
and based on a three-year
кредитам по всем
warranty period
классам по сравнению
с январем 2015 г.
вызвано снижением
ключевой ставки с 17 %
в 2015 г. до 11 % по
состоянию
на январь 2016 г.
2015 2016
11 %
Loss in value:
Other expenses:
the difference between the
price of a new car and a
used car (three years)
the cost of winter tyres and
car wash (twice per month)
6%
2
The cost of car ownership in Russia
кроме полноразмерных
внедорожников свыше
3 млн руб.
20 %
Доля стоимости топлива
в общей стоимости
автомобиля тем выше,
чем дешевле автомобиль,
20 % тратят на бензин
автомобили В класса,
Key metrics
Loss in value is the second most
significant item in the cost of
ownership for all car classes,
ranging from 31% of the total
cost for Class B to 47%
for Class E.
31%
47%
CASCO
23%
As of January 2016,
premiums for CASCO
insurance decreased in
monetary terms by 23% on
average against January
2015 in all surveyed car
classes, except for full-size
SUVs priced at over
RUB 3 million.
17%
2016
2015
As of January 2016,
the loss in value rose
across all car classes.
The lower interest rate in all
surveyed classes (compared
to January 2015) was driven
by the cut in the key interest
rate from 17% in 2015 down
to 11% in January 2016.
11%
2015 2016
As of January 2016,
insurance premiums
account for a
significant share of
the total cost of car
ownership.
3
The cost of car ownership in Russia
21% 27%
6%
20%
The cheaper a car is, the
higher the percentage fuel
represents in its total value:
20% for Class B autos and
6% for Class E vehicles.
The cost of ownership means both
operating expenses and losses in
a car’s value (acquisition cost less
resale revenue).
Key findings on the cost
of car ownership
As part of the survey, we reviewed the
cost of owning a car across various
classes in major Russian cities as of
January 2016 and compared the
results with the January 2015 data.
As of January 2016, the cost of
owning a car had fallen by varying
degrees in different car classes. The
key drivers behind this cost reduction
include:
• cut in the key interest rate from 17%
down to 11%;
• reduction in CASCO premiums by
20% on average;
• decrease in kilometres travelled by
24% on average.
For more details on these data drivers,
see the section titled Survey findings
on key components of the cost of
ownership.
Importantly, the cost of owning a
particular car can vary significantly,
depending on its terms of purchase
and the conditions for operating it.
The key assumptions underlying this
analysis are provided below.
Table 1:
Key survey findings
Indicator, RUB thousand/ year*,
unless otherwise stated*
Class B
(Compact)
Class C
(Golf)
Class D
(Mid-size)
Class E
(Business)
Compact
crossover
Mid-size
crossover
Full-size
SUV up to
RUB 3 million
61.7
90.8
124.8
323.4
113.9
168.1
248.2
473.8
Operating expenses
137.1
174.8
247.5
367.6
213.9
262.6
381.8
564.7
Loans (interest only)
23.2
43.5
68.7
115.1
63.1
81.8
106.3
156.0
Fuel
39.0
44.5
45.1
42.0
42.5
51.2
76.2
78.2
Insurance (CASCO and CMTPL)
49.2
58.9
99.5
154.9
73.8
88.4
149.5
240.5
Maintenance (planned)
9.3
10.2
12.3
19.7
12.9
14.4
15.8
19.3
Taxes and duties**
3.0
4.1
6.6
17.6
5.7
9.3
13.5
48.6
13.5
13.7
15.3
18.4
16.0
17.4
20.4
22.1
198.8
265.6
372.3
691.0
327.8
430.7
630.0
1,038.5
11.9
15.7
19.8
40.5
20.3
23.4
33.4
56.2
Parking*****
120.0
120.0
120.0
120.0
120.0
120.0
120.0
120.0
Total average cost of ownership
per year, including parking
318.8
385.6
492.3
811.0
447.8
550.7
750.0
1,158.5
Loss in value
Other maintenance costs***
Total average cost of ownership
per year
Average cost of ownership, RUB/
km****
(*) average value over three years of ownership
(**) transport tax and car registration (***) winter tyres and car wash twice per month
(****) excluding parking
(*****) for Moscow, the cost of eight-hour parking on all business days throughout the year
Source: PwC analysis
5
The cost of car ownership in Russia
Full-size
SUV over
RUB 3 million
Survey findings on key components
of the cost of ownership
Loss in value
Loss in value is one of the most
significant items of the cost of
ownership for all classes of automobile.
The survey shows that a three-year loss in
value of Class B (Compact), Class C (Golf),
Class D (Mid-size) cars and Compact
crossovers ranges from 31% to 35% of the
total cost of car ownership.
For Mid-size crossovers and Full-size SUVs
up to RUB 3 million, the loss in value
accounts for 39% of the total car ownership
cost. Class E (Business) cars and Full-size
SUVs over RUB 3 million have posted the
largest losses in value over the first three
years in use at 47% and 46%, respectively.
Compared to 2015, loss in value grew in all
car classes, especially in Class B (Compact),
Class E (Business) and Compact crossovers.
The growth in value loss rates ranges from
7% to 12%.
The increase in this indicator versus 2015 has
been driven by more significant growth in
prices for new cars as compared to used
vehicles. This is due first of all to the growing
weight of the currency component in rouble
equivalent in the manufacturer’s cost.
6
The cost of car ownership in Russia
Cars within a single class can lose value
in different ways. This can be driven by
numerous factors, e.g.:
Inside the various car classes interest rates
vary, depending on the specific car model
and special loan offers by banks.
• the reliability and reputation of a given
car model;
Low interest rates are typical of Class B
(Compact) vehicles, which are covered
mainly by the subsidised car loan
programme.
• supply and demand for a given model
in the used car market;
• availability of new, updated versions
of a given car make and model in the
market;
• price trends for similar new cars.
Loans
Car loan interest rates dropped
from 21.5% in January 2015 to
16.1% on average across all
classes in January 2016 (see Table 3: Key
analysis assumptions) due to the reduction
in the key interest rate from 17% to 11% as
of January 2016.
As a result, in January 2016 the interest
rate on a three-year loan for all reviewed
classes (with a down payment of 50%)
averaged 16%, while a year ago this
indicator amounted to 19-23%.
The prevalence of low interest rates for
Class E (Business) cars and full-size SUVs
over RUB 3 million is attributable to the
fact that premium brands lend to their
customers through their own banks, which
offer optimal terms and low interest rates
in order to sell vehicles rather than to
generate interest income.
Although average interest rates across all
car classes are at the same level, the impact
of rising interest rates is likely to vary in
different classes.
Thus, sales in the low- and medium-price
segments are most sensitive to rising
interest rates on car loans, while premium
segment sales are relatively less dependent
on increases in loan interest rates.
Loan charges (interest) in all surveyed
classes amount to 12-21% of the total cost
of car ownership.
Fuel
Fuel expenses in the total cost of
car ownership vary across the
surveyed classes: as a car’s price
rises, fuel expenses shrink.
For example in Class B (Compact) and
Class C (Golf), the share of fuel expenses in
the total cost of ownership amounts to 20%
and 17% on average, respectively, while for
Class E (Business) vehicles and Full-size
SUVs over RUB 3 million this indicator is
6% and 8%, respectively.
For the mid-price segment, fuel expenses
make up about 12-13% of the cost of
ownership.
Insurance
(CASCO and CMTPL)
IInsurance is a significant item in
the total cost of car ownership, amounting
to 17-27%. Compared to the same period in
the previous year, the cost of insurance
came to 20-30%.
As of January 2016, premiums for CASCO
insurance decreased in monetary terms by
23% on average versus January 2015 in all
surveyed classes, except for full-size SUVs
Figure 2:
Breakdown of expenses by class, %
5
7
1
4
5
2
3
4
2
3
6
3
3
4
12
17
20
13
As a result, the heaviest insurance
expenses are incurred by owners of Class E
(Business) cars and Full-size SUVs.
In addition to the car price, a number
of other factors have an impact on the cost
of insurance:
• cost of spare parts and repairs;
• car theft rate;
• car exclusivity, etc.
For Full-size SUVs over RUB 3 million, the
share of taxes and duties in the total cost of
ownership amounts to 4.7%, which is due to
the luxury tax on cars priced at more than
RUB 3 million.
Other expenses
Other car maintenance costs
include winter tyres and car wash
twice per month. These costs are
7
The cost of car ownership in Russia
12
19
17
2
8
23
27
22
Taxes and duties
For Class E (Business), Mid-size crossovers
and Full-size SUVs up to RUB 3 million, it is
around 2.1-2.5%.
12
3
2
17
25
For Class D (Mid-size) and Compact
crossovers, this indicator comes to around
1.7-1.8%, with an average engine capacity of
149 and 142 h.p., respectively.
3
15
19
In monetary terms, the more expensive
the car, the higher the insurance
premiums.
4
2
16
12
Taxes and duties account for
about 1.5% of the total cost of
ownership for Class B (Compact)
and Class C (Golf) cars with an average
engine capacity of 98 and 114 h.p.,
respectively.
3
22
18
priced at over RUB 3 million (compared
to the same period of the previous year).
CASCO tariff reduction is explained by
wide spreading of franchise contracts,
loss-free prolongation, limited CASCO
coverage, CASCO customer attrition,
resulting in a competition for clients in
the insurance market.
5
2
23
21
24
47
31
Class B
Loss in value
34
34
Class C
Class D
46
35
Class E
Compact
crossover
Insurance (CASCO and CMTPL)
Maintenance (planned)
Taxes and duties
almost at the same level in monetary terms,
so their share in the total cost of ownership
decreases with any increase in the car price.
Parking expenses
(for Moscow)
Currently, such expenses are
mostly relevant for Moscow as
well as other major Russian cities that
already have paid parking facilities
(Moscow parking rates were used for
39
39
Mid-size
crossover
Full-size
SUV up to
RUB 3 million
Loans (interest only)
Full-size
SUV over
RUB 3 million
Fuel
Other maintenance costs
calculation purposes; rates are lower in
other cities).
Yet, given the ongoing need for paid
parking, the share of these expenses in
the cost of ownership is rather significant
and increases with any decrease in the car
price.
Parking rates have remained unchanged
since January 2015.
2
5
Key assumptions
The survey covered new car makes and
models that are officially sold in Russia.
Analysis findings for each class show the
average result for cars in that class.
The following key assumptions underlie
our survey:
For analysis purposes, eight classes have
been identified corresponding to car size
and price.
classes
All major indicatorscar
(car price,
loan
terms and conditions, etc.) are as of the
second half of January 2016 and are
consist
of
based on PwC analysis,
data provided
by car dealers, and information from
public sources.
• A car is purchased with a standard
equipment package, a gasoline engine
and an automatic transmission.
Each class includes five popular cars
(compared to the analysis carried out in
early 2015, the mix of cars has changed
as sales of some models have been
discontinued).
8
5
• A car is purchased and driven in
a major Russian city.
• A car is used by one owner during
the warranty period (three years).
popular cars
• A car is purchased on credit with
a down payment of 50%.
+
Automatic
transmission
Table 3: Key analysis assumptions (for Moscow and other major Russian cities)
Key assumptions
Car price,
RUB thousand
Class B
(Compact)
578.8
951.6
98
114
16,644
16,882
Engine, h.p.
Kilometres travelled,
km/year
Fuel consumption
(gasoline AI-95,
AI-92 or similar),
l/100 km
Loss in value over
three years, % of the
initial value
Loan interest rates
Class C
(Golf)
6.8
7.4
31%
32%
13.1%
15.8%
8
The cost of car ownership in Russia
Class D
(Mid-size)
Class E
(Business)
Compact
crossover
Mid-size
crossover
Range Rover
Mitsubishi
1,282.6 Audi
2,509.0
1,295.6
1,723.8
Mercedes
Mazda 173
149
194 KIA 142
Jaguar18,435
Volkswagen
18,833
17,063
16,146
Nissan
16.7%
17.2%
Loan
Full-size
SUV over
RUB 3 million
50%
down payment
2,472.4
3,481.2
205
300
18,833
18,467
7.9
11.1
11.3
28%
30%
40%
16.7%
15.5%
14.8%
Lada Skoda
6.6
6.9
7.3
Lexus
Toyota
BMW
Renault Hyundai
29%
32%
27%
Infiniti
Ford
19.0%
Full-size
SUV up to
RUB 3 million
rs
3
a
ye
Scope of analysis
Figure 4:
Mix of car classes
Class B (Compact)
Лада
Granta
Renault
Logan
KIA RIO
Hyundai
Solaris
Volkswagen
Polo
Class C (Golf)
Volkswagen
Golf
KIA Ceed
Volkswagen
Passat
KIA Sportage
Volkswagen
Tiguan
Nissan
Qashqai
Hyundai
Tucson
Toyota RAV 4
Skoda Octavia
Nissan
Almera
Ford Focus
KIA Sorento
Hyundai
Santa Fe
car classes
consist of
5
Mid-size crossover
Mitsubishi
Outlander
Nissan X-Trail
Mazda 6
Toyota Camry
Skoda Superb
Class E (Business)
Audi Q5
Toyota
Highlander
Toyota Land
Cruiser Prado
Ford
Explorer
Mitsubishi
Pajero
Volkswagen
Touareg
Full-size SUVs over RUB 3 million
Range Rover
Audi Mitsubishi
Mercedes KIA Mazda
Volkswagen Jaguar
Nissan
Mercedes
E-class
Audi A6
popular cars
Full-size SUVs up to RUB 3 million
Class D (Mid-size)
Opel
Insignia
8
Compact crossover
BMW 5
9
The cost of car ownership in Russia
Lexus ES
Jaguar XF
BMW X5
Infiniti QX70
Mercedes GLE
Toyota Land
Cruiser 200
Range Rover
Sport
Lada Skoda
Lexus Toyota BMW
Renault Hyundai
Ford Infiniti
Survey methodology
Loss in value
This indicator is calculated as the
difference between the price of a new
car and the price of a similar three-yearold used car, based on analysis of data
provided by official dealers and
specialised car trading websites.
Insurance (CASCO and CMTPL)
This indicator is calculated according to
premiums for CMTPL and CASCO
insurance policies for car owners with
the following profile: male, married with
children, 30 years old, driving
experience of 10 years, with a good driving record.
Loans (interest)
Planned maintenance
This indicator is calculated on the basis
of a three-year loan with a down
payment of 50%. The interest rate is
based on car loan offers as of the second
half of January 2016.
This indicator is based on
data provided by
official dealers.
The calculation of the cost of ownership includes interest
on loans only.
Fuel
This indicator is calculated on the basis
of the average number of kilometres
travelled by a car, fuel consumption per
100 km and the price of one litre of fuel.
The average number of kilometres
travelled by a car is based on data provided by
specialised car trading websites. Fuel consumption per
100 km was assumed to be the same as specified in the
vehicle’s certificate. Fuel price (gasoline AI-92, AI-95
and AI-98) is based on quotes from public sources.
10
The cost of car ownership in Russia
Taxes and duties
This indicator includes car registration
fees with the State Road Traffic Safety
Inspectorate and transport tax.
Transport tax is based on the transport
tax rate in Moscow as of the second half of January 2016,
as well on the engine capacity.
Luxury tax, which has been applied to cars priced at over
RUB 3 million, is calculated as the product of transport
tax by an additional multiplier that depends on the car
price and its useful life.
Other expenses
This indicator includes
the cost of winter tyres and car wash
(twice per month).
Parking expenses (for Moscow)
РThis indicator is calculated as the
average cost of an annual parking pass
in downtown Moscow.
The expenses are presented for
illustrative purposes.
Contacts
Oleg Malyshev
Partner, Corporate Finance
Practice Leader
+7 (495) 967 6497
[email protected]
Press Service, PwC Russia
Petr Yudin
+7 (495) 967 6000 ext. 5018
[email protected]
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