Passenger vehicle sales in Russia could fall by up to 25% this year,the head of Russias leading automanufacturer AvtoVAZsaid Wednesday.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, were 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 weresold 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 havebuilt 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 Russias domestic auto industry have been compounded with a nearly threefold drop in electric vehicle sales in the first five months of 2025, Russias Vedomosti business newspaperreported last week.Russias 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.