Russian car sales plummeted by nearly 30%
The Russian car market's recovery seems to have hit a snag. After an initial uptick, monthly car sales have been struggling to keep up with last year's figures since November. The drop was substantial in March, with sales plummeting by nearly 45% compared to the previous year. A slight rebound was noticed in April, with over 100,000 passenger cars finding buyers—the first time since January. Yet, the gap from the 2025 target remains sizeable (25%), and many experts had hoped that the worst was over.
Unfortunately, May took away some of that optimism. Data from the "Autostat" agency suggests that sales dropped by 28.3% in May 2025 compared to the same month last year. So far this year, only 440,259 cars have been sold, a 26% decrease from the same period in 2024. The most popular brands have all seen a downturn, but Changan, Geely, and surprisingly, AvtoVAZ have been hit the hardest. Despite this, AvtoVAZ remains the leader but has seen its market share decrease from over 30% earlier this winter to 28% in May. The only significant increase among the top 10 brands was Solaris, with a 69.7% increase. It's worth noting that Solaris includes models from Hyundai and Kia, which are still being assembled in St. Petersburg.
According to the Vice-President of the National Automobile Union, Yan Hayceer, the high interest rates are the main factor hindering market growth. Despite dealers offering discounts to attract customers, prospective buyers are hesitant due to the cost of loans and banks' reluctance to issue them. The car market is stagnating, with no signs of improvement anytime soon.
Experts are worried about the growing gap between this year's sales and last year's figures. In 2024, about 1.6 million new cars were sold, but even the most optimistic forecasts predicted around 1.4 million for 2025. Now, these figures are being constantly revised downwards. In Hayceer's opinion, if the market can reach 1.1–1.2 million sales, it would be considered a success. Prices alone can't save the situation, and the market's recovery will depend on the Central Bank lowering the key rate.
Economic uncertainty, increased tariffs, a shift in consumer preferences, internet sales concerns, seasonal variations, and lack of local production are some of the factors contributing to the market's woes. All of these factors make for a challenging environmental for the Russian car market, with sales continuing to decline and consumer confidence remaining low.
Finance experts are increasingly concerned about the shrinking gap between this year's business figures and last year's in the Russian car market. The high interest rates in the finance sector are highlighted as a major hindrance to market growth, with potential buyers wary of the cost of loans and banks' reluctance to issue them. Consequently, the recovery of the business sector in the Russian car market appears to be stagnant, with no signs of improvement in sight.
