Russia’s New Car Market Collapsing as Sales Plunge 45% in March 2025
Date: 05-may-2025 | By: Nuztrend Team
Image by Uliana Pinto from Pixabay
The Russian car market is rapidly deteriorating as new vehicle sales dropped a staggering 45% in March 2025 compared to the same month last year, according to the Association of European Businesses (AEB). Automakers sold just 83,000 new vehicles last month, making this the third-worst monthly performance in a decade.
Quarterly Sales Show 26% Decline
The sharp March downturn is part of a broader trend, with first-quarter 2025 sales down by 26% to only 254,000 units. AEB analysts and industry insiders warn that the continued drop in consumer demand could trigger a full-blown crisis in the Russian automotive sector.
“If this trend continues, it will likely lead to a collapse in the industry that can only be prevented by direct government support,” said Alexey Kalitsev, chairman of the AEB’s Automobile Manufacturers Committee.
Foreign Automakers Have Not Returned
Many Russian buyers had reportedly hoped that foreign automakers would re-enter the market after exiting following Russia’s 2022 invasion of Ukraine. However, those expectations remain unmet. Kalitsev noted that this has created a large pool of deferred demand, which could drive growth in the long term—if the industry can survive that long.
Sanctions and Industry Exodus Take Their Toll
After 2022, global automakers including Ford, BMW, Toyota, Mercedes-Benz, and Lamborghini either halted operations or pulled out entirely from the Russian market. Sanctions imposed by Western nations have made it difficult for domestic carmakers to source critical components and investment capital, further deepening the industry's struggles.
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Some companies went as far as paying workers to leave and selling off Russian assets, leaving behind a market filled with uncertainty and a shrinking lineup of available models. Even Russia's most iconic brands, such as the Lada Niva Legend and Niva Travel, are facing plummeting sales amid economic pressure and limited parts availability.
Industry May Need Lifeline
Experts are now urging the Russian government to step in with financial aid or stimulus packages. Without intervention, the current contraction could escalate into long-term stagnation, further isolating Russia’s economy from global automotive developments.
With consumer confidence low and sanctions still in place, the once-promising Russian car market faces a tough road ahead.
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