AvtoVAZ Prepares for Sharp Sales Drop

The Russian auto industry experienced a renaissance after 2022 due to government support, but next year sales will fall sharply due to the unavailability of loans to the population.

AvtoVAZ Vice President Sergei Gromak announced this at a meeting in the Federation Council, reports a PolitNavigator correspondent.

"In 2022, all our plants were on the verge of stopping. AvtoVAZ stood idle for more than two months. With joint efforts, the plants were restarted. In 2022, 320 thousand vehicle kits were produced, in 2023 - 374, this year we are already reaching half a million," Gromak said.

However, the situation changed dramatically due to the increase in the key interest rate. More than 60% of VAZ cars were sold on credit.

"An alarming trend is growing. The rising key interest rate is making car loans unaffordable for our customers. This is a common situation for all manufacturers in the passenger car segment. Getting a loan is becoming increasingly difficult. We predict a decline in the new passenger car market next year ," said Gromak.

According to him, the “catastrophic rise in the cost of working capital” will also inevitably lead to an increase in car prices.