Russia's auto industry on the brink: sales plunge by almost 24%!

Russia's auto industry on the brink: sales plunge by almost 24%!

The future of the Russian auto industry is hanging in the balance and that has far-reaching implications. In the last few months, the economic situation has deteriorated dramatically, as merkur.de reports. After a brief recovery, manufacturers are facing another decline. In the period from January to July 2025, car sales in Russia fell by a whopping 23.9% to a total of 651,029 units. Particularly bitter: In July alone the decline was 11.4%.

Vehicle production has experienced a dramatic collapse. It fell 20% in the first nine months of the year, equivalent to 2022 production levels. In detail, the decline looks like this: In the first quarter of 2025 there was a decline of 9.2%, followed by 23% in the second and even 26.7% in the third quarter. The number one volume loser is Avtovaz, Russia's largest carmaker, which saw sales fall 24.9% in the first eight months of 2025.

AvtoVAZ and the challenges

AvtoVAZ's financial problems are enormous. In April 2025, Lada sales were forecast to decline by 33% compared to the previous year. The company has already drastically reduced its production plans to 300,000 units for 2025 - it had originally expected 500,000 units. To save costs, Avtovaz also announced a four-day week for the next six months.

But the challenges don’t just come from production. High credit costs and a short-sighted import policy are also slowing down business. The total value of auto loans fell 45.5% year-on-year in January-September 2025 and now stands at about 1.03 trillion rubles ($12.8 billion). This development has put the industry under severe pressure and hopes for a quick recovery remain muted for the time being. Experts expect that the situation will not improve significantly in the next one or two years.

Dependence on China

Another critical point is Russia's dependence on China. Due to ongoing sanctions in the West, many manufacturers now source their vehicles and spare parts almost exclusively from China. In 2024, Chinese brands accounted for 60% of new car sales, while the import share was 77%. This dependency could continue to cause problems for the industry.

Finally, a discussion currently underway in society discusses the ethical implications of having children in a world full of challenges. It is argued that it is more considerate not to send children into a future full of avoidable problems, as emphasized on stophavingkids.org. This view puts the egoism debate at the center and calls for supporting existing life instead of creating new life - be it from people, animals or nature.

So while the automotive world in Russia is stagnating and weakening, there are also social issues that are important for a sustainable future. Whether in the automotive sector or in social discourse – changes seem essential.