News Feed

Carmaker forecasts 30% collapse in Russian car market by 2025

1 min read
Carmaker forecasts 30% collapse in Russian car market by 2025
A logo for Lada automobiles, a unit of OAO Avtovaz, stands on display at the Moscow International Auto Salon (MIAS) in Moscow, Russia, on Wednesday, Aug. 27, 2014. (Andrey Rudakov/Bloomberg via Getty Images)

Sales of new cars and light commercial vehicles in Russia could decline by 21-30% in 2025 if high interest rates persist, Avtovaz CEO Maxim Sokolov said on Nov. 19, according to the state-owned TASS news agency.

Sokolov attributed the anticipated decline to customers diverting savings from car purchases to bank deposits due to elevated interest rates.

Russia's central bank raised its key interest rate to 21% in October, its highest level since 2003, aiming to curb inflation caused by massive wartime spending to meet its 2026 target.

"This will undoubtedly have a negative impact on the market and production plans in the medium term," he said, warning that Avtovaz’s current production levels will not be sustainable under such economic conditions.

The state-owned Avtovaz is Russia's largest carmaker, best known for its flagship Lada vehicle series.

The high rates are not only affecting the automotive sector but also threatening Russia’s broader economy. Izvestia reported on Nov. 13 that about 30 Russian airlines, responsible for 26% of domestic passenger traffic, are at risk of bankruptcy in 2025 due to economic pressures.

Avatar
The Kyiv Independent news desk

We are the news team of the Kyiv Independent. We are here to make sure our readers get quick, essential updates about the events in Ukraine. Feel free to contact us via email with feedback and news alerts.

Read more
News Feed
 (Updated:  )

Russia attacked the city of Kamianske in the early hours of Sept. 5, killing four people and injuring five others, regional Governor Oleksandr Hanzha reported. Three of the victims have been hospitalized, with one in intensive care.

Video

In this video, the Kyiv Independent’s Zhenia Doluba speaks with Kyiv residents about how they are coping with Russia’s relentless attacks and the growing exhaustion caused by the significantly increased number of air raid alerts.

Show More