Car Sales in Russia May Fall by 25% in 2025, AvtoVAZ CEO Says
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Car Sales in Russia May Fall by 25% in 2025, AvtoVAZ CEO Says
Passenger vehicle sales in Russia could fall by up to 25% this year, the head of Russia’s leading automanufacturer AvtoVAZ says. Analysts had initially projected a more modest 10% year-on-year decline for 2025, citing inflation and rising scrappage fees.Dealerships across Russia are increasingly turning to aggressive discounts to attract buyers.
“The market is clearly going to decline, and we expect that drop to be about a quarter compared to last year,” CEO Maxim Sokolov told state broadcaster Rossia 24. “In other words, we’re forecasting that passenger car sales will total around 1.1 million, or possibly 1.2 million if we include light commercial vehicles.”
For comparison, 1.55 million passenger cars were sold in Russia last year, which marked a 47% year-on-year increase. Analysts had initially projected a more modest 10% year-on-year decline for 2025, citing inflation and rising scrappage fees.
Dealers also say demand is being undermined by macroeconomic uncertainty. Potential buyers are holding onto their savings or converting funds into U.S. dollars, betting on a ruble depreciation widely expected by economists.
Inventories of passenger vehicles have built up to more than 500,000, according to the AvtoStat analytics agency.
Dealerships across Russia are increasingly turning to aggressive discounts to attract buyers, which “destroy” the car sales business, according to the head of AvtoStat Sergei Tselikov.
The challenges facing Russia’s domestic auto industry have been compounded with a nearly threefold drop in electric vehicle sales in the first five months of 2025, Russia’s Vedomosti business newspaper reported last week.
Russia’s car market has been fundamentally reshaped since the 2022 invasion of Ukraine, following the mass exit of Western automakers and a surge in imports from Chinese manufacturers.
Russia’s top carmaker Avtovaz expects market to shrink by 25% this year
Sales of passenger cars in Russia are set to drop by 25% to 1.1 million units this year. Russia’s car market slumped as Western companies halted sales and production after Moscow’s February 2022 invasion of Ukraine. Spurred by the rapid arrival of Chinese carmakers, the market gradually recovered before starting to struggle again this year, analysts say. Avtovaz is taking anti-crisis measures and adjusting its production plan for 2025.
June 18 (Reuters) – Sales of passenger cars in Russia are set to drop by 25% to 1.1 million units this year, the head of Avtovaz, the country’s largest automaker, said on Wednesday.
Russia’s car market slumped as Western companies halted sales and production soon after Moscow’s February 2022 invasion of Ukraine. Spurred by the rapid arrival of Chinese carmakers, the market gradually recovered before starting to struggle again this year.
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“The situation will be difficult, the market will fall, it is already quite obvious, and the volume of the decline will be about one quarter compared with last year,” Avtovaz CEO Maxim Sokolov said on TV channel Russia 24.
In late 2024, Sokolov had blamed the central bank’s high key interest rate as one of the difficulties facing the auto sector.
On Wednesday, Sokolov said that around 500,000 new cars were ready and waiting to be sold, but finding buyers was difficult.
In January-May, sales of new passenger cars fell 26% to 440,259 units, according to data from analytical agency Autostat, while Avtovaz’s own sales fell 24.2% to 131,316 units.
“This is serious, production cannot move forward with such fluctuations,” Sokolov said.
Avtovaz is taking anti-crisis measures. The company is adjusting its production plan for 2025 and expects its own sales to drop by 20-25% to 367,200 cars, the TASS news agency reported, citing Sokolov.
Reporting by Gleb Stolyarov, writing by Alexander Marrow; Editing by Mark Trevelyan
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