Russia’s 2024 Auto Sales Recovery Unlikely to LastRussia’s 2024 Auto Sales Recovery Unlikely to Last

New-vehicle sales in Russia reached a 5-year high in 2024 thanks in part to pent-up consumer demand, but the recovery is not expected to extend into 2025.

Analysts with the Avtostat consultancy predicted sales last year would not exceed 1.4 million units, but deliveries increased 48.4% from a year earlier to 1.57 million, the market’s best performance since 2019 when 1.59 million units were sold.

Avtostat spokesman Sergey Tselikov tells the Russian business publication Kommersant that last year was marked by an end to nearly 4 years of shortages, and consumers responded to the wider availability of cars. Many buyers also were motivated by fears of further price increases while purchasing power also increased – especially among Russians affiliated with the military and associated industries.

Russian flagship automaker AvtoVAZ saw 2024 sales increase 34.4% year-on-year to 436,160 units, although its market share fell from 30% to 28%. AvtoVAZ’s Lada was the market leader and was the only non-Chinese nameplate among the country’s top 10 best-selling auto brands.

AvtoVAZ President and CEO Maxim Sokolov says production reached a 10-year high last year

at 525,530 units, which was 30% higher than in 2023.

Other top performers in the Russian market were Chinese brands Haval, up 70.6% to 190,620 units; Chery, up 32% to 157,000; and Geely, up 59.4% to 149,120.

Industry analysts do not expect the recovery to last in 2025. They say this is because of the overall deterioration of the business environment caused in part by the prolonged effect of sanctions imposed following Russia’s February 2022 invasion of Ukraine. They also cite inflation, high interest rates, tightened credit and overstocking of the market by Chinese automakers ahead of an increase in Russian recycling fees that took effect Jan. 1.

The sluggish Russian economy also has led to the suspension of major assembly projects. An example is the luxury Aurus sedan, which was to be assembled at a former Toyota plant in the village of Shushary in the St. Petersburg region. The project was indefinitely suspended after the withdrawal of potential manufacturing partner Hongqi, the luxury division of state-owned automaker FAW.