Decrease in new vehicle sales in Russia by 26%
Russian Car Market Faces Continued Contraction as Showrooms Close
The Russian car market is experiencing a further contraction, as showrooms across the country close their doors, a trend that began on July 31st, 2025. This development comes amidst a decrease in the overall market, particularly for passenger cars, electric vehicles, and imports.
According to recent data, the market share of Russian electric cars increased to 27% compared to 18% in the same period in 2024. However, this growth has not been enough to offset the overall decline. The closure of showrooms is a sign of the challenges faced by car manufacturers in the Russian market.
The contraction in the Russian car market is mainly due to several interconnected factors. High vehicle prices and stricter car loan policies with higher interest rates from the Central Bank have significantly reduced consumer purchasing power and demand for cars in Russia. The influx of Chinese car brands, which increased from 60 to 124 by mid-2025, has introduced intense competition through price dumping, leading to large unsold inventories and undermining domestic producers like Avtovaz.
Despite the rise in Chinese imports, the overall market has contracted, with passenger car sales down by roughly 27–28% year-on-year in mid-2025. About 200 dealerships (5% of total) have closed due to declining consumer demand and economic slowdown, and another 30% of dealerships face financial distress. Financial conditions are tight, with average loan interest rates as high as 30–40% APR, limiting financing access despite some state subsidies partially covering car prices.
The market for new electric vehicles in the first seven months of 2025 decreased by 51% year-on-year, with 6.1 thousand units sold. The market for buses decreased by 52%, with 5.9 thousand units sold, and the market for light commercial vehicles decreased by 19%, with 58 thousand units sold. The market for trucks decreased by 55%, with 31.4 thousand units sold.
In contrast, imported cars saw a decrease of 33% in July 2025, with 59.7 thousand units sold, while Russian-made cars saw an 8% increase, with 74.8 thousand units sold. However, the Russian market for passenger cars decreased by 24%, with 646,7 thousand units sold in July 2025.
The closure of showrooms is a reflection of the struggling Russian car market. Car dealers are refusing contracts with brands due to the current market conditions, and many are closing unprofitable points due to weak demand. Showrooms of mass, premium, and luxury class segments are shutting down. The closure of car dealerships is a response to weak demand in the Russian car market, and the decline may continue. The closure of showrooms is a potential indication of a prolonged downturn in the Russian car market.
- The continued contraction in the Russian car market, as evidenced by closing showrooms, has significant implications for the automotive industry and related businesses, such as finance and transportation.
- The Russian car market, mainly affected by high vehicle prices and stricter car loan policies, has witnessed a decrease in sales, particularly for passenger cars, electric vehicles, and imports.
- The Russian market for new electric vehicles, light commercial vehicles, buses, and trucks has shown a decrease, while imported cars have seen a reduction, in contrast to a slight increase in sales of Russian-made cars.
- The challenge faced by car manufacturers in the Russian market is reflected in the closure of showrooms across segments, including mass, premium, and luxury cars, indicating a potential prolonged downturn in the automotive sector of the lifestyle industry.
