Russia’s automotive market picks up speed
The Russian market for passenger cars has rebounded following the 2022 exit of a number of foreign manufacturers, whose brands had previously accounted for a significant portion of sales in the country. Car sales in Russia in 2024 have broken a 10-year record, with recent events spurring the rapid development of the country's domestic automotive industry.
Car country
According to figures from Autostat, there are 46.4 million passenger cars in Russia. Consumers with average incomes, including those in professions not requiring qualifications or higher education, can generally afford to buy a car. Owning a vehicle is less common among those categorised as “poor”, whose spending on food, clothing, and other staples exceeds 50% of their total expenditure.
Cars in Russia can be placed into two groups:
The top 10 most popular models in Russia include five Russian cars and five from overseas manufacturers.
Passenger cars in Russia by category, January 2024
Source: Autostat
Passenger car sales in Russia take place via car dealerships that either belong to individual brands or to independent distribution companies offering several brands at once. Manufacturers can combine both options by opening their own points of sale as well as partnering with other retailers.
Second-hand cars are marketed through online marketplaces or specialised outlets. Used cars can also be bought at car dealerships, though various online services are particularly popular. In 2023, 5.7 million used car transactions took place, with dealerships involved in only 10% of cases.
The trend towards greater comfort
At the beginning of 2022, several foreign companies discontinued their services in Russia, halting the supply of cars to the country and shutting down or selling their assembly facilities.
Chinese companies have stepped into the resulting niche, and domestic production has also intensified.
In 2024, new vehicle sales in Russia have not merely increased, but have broken records set a decade ago.
The Association of Russian Automakers calculates that dealerships sold 1.1 million passenger cars in the first nine months of 2024 (+60.3% compared to the same period last year).
Rossiyskaya Gazeta reports that almost 685,000 Chinese cars were sold in Russia between January and September 2024, exceeding the 2023 total and reflecting growing consumer confidence in Chinese auto brands. The number of dealerships is also on the rise, with more than 2,400 counted at the beginning of summer 2024.
Number of Chinese brand dealerships in Russia, June 2024
Source: Autostat
Haval and Cherry were the best-selling brands of 2024 in Russia, with over 100,000 cars sold each. By the end of September, Geely was drawing level with the leaders, having sold 96,700 units. Changan rounded off the top 4 Chinese brands with a total of 71,500 cars sold. Other China-based manufacturers sold less than 40,000 vehicles.
Sales have grown for several reasons:
The Russian Government has adopted a decree to increase the disposal fee for all regular and special-purpose vehicles. The 70–85% tax rate spike was introduced on 1 October. The disposal fee will be indexed annually by 10–20%.
In August and September 2024, Russia’s automotive market demonstrated record sales compared to the past few years. Customer activity was apparent across all brands and models without exception and was linked to the expected autumn price increases. Many people tried to buy cars before the price went up,” says Ilya Petrov, retail sales director at Avilon AG.
Consumer trends in the Russian automotive market:
According to Ilya Petrov, buyers are quick to accept new products both in the general category—Jetour T2, Geely Atlas, Preface, Okavango, Cityray, Cherry Tiggo 8Pro MAX, GAC GS3—and across hybrid and electric models, which include Seres AITO M5/M7, M-HERO 917, city car ORA 03/03GT, and WEY 05/07, as well as Voyah Free and Dream, which have been popular for some time.
Passenger car sales in Russia for the first 10 months of 2024 by model (%, share in sales)
Source: Statista
Check out our article on how to enter the Russian market.
Production and sales on the rise
Both sales and domestic manufacturing are increasing in Russia. In 2023, local plants produced 730,000 cars. The country ranked 16th in the world's top 20 largest car markets and 1st in the world for growth. Almost half of those vehicles were assembled at Russia's AvtoVAZ plant, including Lada Granta, Lada Vesta, and Lada Niva models. One in seven rolled off the assembly line at the Chinese Haval plant (located in Tula).
The Ulyanovsk Automobile Plant (UAZ) accounted for 4.9% of the total number of vehicles produced, including the UAZ Hunter and UAZ Patriot. This was closely followed by Avtotor, whose Kaliningrad facility has streamlined the production of BAIC, SWM, Kaiyi, and Jetour passenger cars. Avtotor is soon to launch a line of electric cars under its own brand, AMBERAUTO A5.
Finally, 3.3% of passenger vehicles in 2023 were produced by Moskvich, a Moscow enterprise that uses former Renault facilities to assemble modernised JAC JS4 vehicles.
Russia's leading passenger car manufacturers in 2023 (market share, %)
Source: Autostat
There are several other players in Russia's automotive market, one being NAMI, creator of the Aurus line of vehicles. The assembly shops of their research and engineering centre produce the executive class sedan Aurus Senat and crossover Aurus Komendant, about 70% of whose components are Russian-made.
Another car assembly plant, Motorinvest, operates in the Lipetsk region, and is set to produce electric and hybrid cars under the Evolute brand. In September, Motorinvest announced plans to assemble two petrol-powered crossover models.
Apropos
Yuri Gagarin, the first human to travel in space, was awarded a Volga car for his heroic deed. The number and letter characters on the license plate, 12-04 UAG, indicated the date of his flight—12 April—and the cosmonaut's initials.
Russia's car market has benefitted, among other things, from government support. The Ministry of Industry and Trade has drawn up a list of 12 vehicle brands that are recommended for use by officials.
The list includes LADA, Moskvich, UAZ, Aurus, Sollers, Kaiyi, BAIC, AMBERAUTO A5, SWM, and Citroen. The last vehicle, in its C5 Aircross form, is produced by PSMA Rus in the Kaluga region, and thus eligible as a domestically produced car for public procurement.
All recommended car brands are produced based on special investment contracts. Each unit comes off the assembly line with a Russian VIN number, encouraging car brand owners to localise their production facilities in Russia.
Industry development prospects
According to the Association of European Businesses (AEB), the Russian car market grew by 58% in January–September 2024 and by 33% in September 2024 year-on-year. The organisation expects the increased production of passenger cars to continue. By the end of 2024, the number of cars sold in Russia could reach 1.5 million units.
Ilya Petrov:
retail sales director at Avilon AG
October 2024 sales were similar to September, though beginning to tail off. Retail traffic is starting to decline, and November will see Russia's car market stop growing altogether. Meanwhile, demand keeps drifting towards Chinese carmakers as we see ongoing development of the localised brand market. According to our estimates, the final figure for the number of new passenger cars sold in Russia in 2024 will exceed 1.5 million.
Autostat predicts that total sales of new Chinese cars in 2024 will amount to 900,000 vehicles, constituting another record.
According to Aleksandr Kovrigin, deputy director general of ACM Holding, sales of new passenger cars will exceed last year's figures by 45–50% by the end of 2024, with the market growth rate stabilising in the long run. He notes that customers are increasingly interested in pickup trucks.
Ilya Petrov highlights the fact that most new Chinese brand models reach the Russian market quite quickly once launched. Localised models are also becoming a more frequent feature, and the degree of localisation is increasing. The number of new brands emerging is bound to be smaller than in the previous two or three years since the market has more or less stabilised, but a solid product and the right strategy will always help you to secure a foothold.
Russia is open to cooperation in many areas, but what do you need to know before you can successfully enter the Russian market? Find out in this article.