Economy. Russia: The automobile market is in free fall

The figures from the Autostat agency are not encouraging. In March 2025, 79,822 new cars were sold in Russia, a 45.5% decrease compared to March 2024.

Paralyzed by record inflation, 10% over the past year, Russians are buying fewer new cars than before.

The annual figures also reflect the poor health of the sector: 936,000 new cars sold compared to more than 1.4 million in France in 2024, according to data from Car Industry Analysis.

And this year could be the worst for the auto market since the start of the war in Ukraine, according to the specialist media Ward Auto .

"We see that demand is falling: for our cars, by about a third, across the entire market, by almost 50 percent, including for AvtoVaz," AvtoVAZ CEO Maxim Sokolov worried last week.

Towards a return of Renault?

The decline, which began with the Russian military's invasion of Ukraine in February 2022 and the battery of economic sanctions that hit the Russian economy, has driven foreign brands away.

Until 2022, Renault was the majority shareholder of AvtoVAZ, which owns the Lada brand, before selling its shares for a symbolic one ruble.

But the diamond brand has a buyout clause that allows it to regain control of the Russian brand.

Valid until 2028, it may not be activated by Renault, however, as a ceasefire between Ukraine and Russia has not yet been reached.

China dominates the market

"If Renault wants to return, it will have to pay at least 112.5 billion rubles (1.3 billion euros)," AvtoVAZ executives say.

The struggling Russian automaker is wary of the potential comeback of foreign brands. The manufacturer could lose market share to the power and quality of Nissan, Hyundai, and Renault vehicles.

"They no longer meet safety standards, especially the airbags. There has been a huge step backwards in terms of supply," reports an automotive market expert, quoted by Le Point , regarding the new fleet of Lada cars.

A testimony that speaks volumes about the weaknesses of Lada and AvtoVAZ in competing with foreign giants.

The latest statistics from the Autostat agency already illustrate the fierce competition from Chinese brands. By 2024, 9 of the 10 manufacturers in the top 10 will be Chinese.

Russia has become the largest export market for Chinese vehicles, selling over one million vehicles last year. This figure has increased sevenfold since 2022, Business Insider reports.

Beijing has taken advantage of the departure of competitors to flood its neighbor with Chery and Geely brands. For Maxim Sokolov, this is "a real threat to the continued existence of the domestic automotive industry."