Correction and adaptation: what is happening to the Russian automotive industry
The domestic automotive industry is experiencing a structural crisis, it shows the worst performance among all industries. This is the conclusion reached by the specialists of the Center for Strategic Research. How deep the crisis is and what the prospects are — in the material of Izvestia.
Couldn't be worse?
According to the results of 10 months, the domestic automotive industry has demonstrated the worst result among all industries. This is stated in an analytical review prepared by the specialists of the Center for Strategic Research (CSR).
According to the data provided, in January–October 2025, the production of motor vehicles, trailers and semi-trailers decreased by 22.2% (in annual terms), while in the same period last year there was a positive trend (+20.4%). At the same time, in the first 10 months of this year, the Russian industry as a whole grew by 1%, and the manufacturing sector, which includes the automotive industry, by 3.1%.
So, according to the results of 10 months of 2025, 537 thousand passenger cars were produced in Russia, which turned out to be 9.6% less than a year earlier. Truck production decreased even more noticeably — by 32%, according to the analysis.
In addition to reducing the volume of new car production, experts also note a decline in the market. So, from January to November, according to Autostat, sales of new passenger cars decreased by 17.8%, to 1.19 million units. The situation in the heavy machinery segment is even worse: 41.8 thousand large-capacity vehicles were sold in 11 months, which is 56% less than in the same period last year.
The CSR notes that the deterioration of the automotive industry is also confirmed by the financial performance of the industry. As follows from the analysis, the pre-tax profit of the car manufacturing sector for the first nine months of this year amounted to 48.3 billion rubles, which is more than three times lower than the result for the same period in 2024.
"The study shows that the industry is experiencing not a cyclical correction, but a structural crisis. The industry remains a critically important employer in many cities (Tolyatti, Naberezhnye Chelny, Nizhny Novgorod) and a driver for thousands of related enterprises. Its collapse threatens not only to increase unemployment and social tension, but also to put a direct burden on budgets of all levels, which will have to compensate for falling incomes and growing social obligations," the report of the Center for Strategic Research says.
It's not that bad
The Russian automotive industry has been significantly affected by the effects of external sanctions pressure, which increased in 2022, the Ministry of Industry and Trade told Izvestia. However, it is not entirely correct to call this industry the "most affected", the department notes. The ministry recalled that last year, the automotive industry, along with other sectors (for example, the manufacture of metal products, as well as the manufacture of computers, electronic and optical products), became one of the key growth drivers of the entire Russian manufacturing industry.
— This year, in parallel with the adaptation to the ongoing sanctions pressure on the industry, a number of macroeconomic factors have a significant impact, including a high car loan rate. Despite this, in recent months there has been a tendency to slow down the rate of market decline, the press service of the Ministry of Industry and Trade reported.
The ministry said that by the end of January–November 2025, the market for new cars of domestic production exceeded 738 thousand units, which is only 2% less than in the same period last year (with an overall market decline of 21%). The ministry noted that the share of Russian vehicles in the first 11 months of 2025 increased by 11%, reaching 55% of the total volume of vehicles sold during this period. According to the results of last month, 80.9 thousand cars produced at Russian enterprises were sold — 57% of all cars sold, the Ministry of Industry and Trade specified. The ministry also recalled that since 2022, more than 80% of the capacities left by former foreign partners from unfriendly countries have been restarted.
— Despite some adjustments to the production programs of enterprises in 2025, which is necessary in connection with adaptation to market dynamics and in order to avoid an overproduction crisis, none of the existing plants stopped production processes. It is important that Russian enterprises are ready to quickly increase production volumes in the event of an expansion in effective demand, the Ministry of Industry and Trade emphasizes.
Programs aimed at stimulating demand for domestic cars, including preferential car loans and preferential leasing, are aimed at this. According to the results of 11 months of 2025, over 185 thousand cars were sold using these tools, the volume of discounts provided amounted to 68.5 billion rubles, the ministry said. The Ministry of Industry and Trade also noted that along with the automotive industry itself, the automotive component sub-sector is being systematically recreated, which provides hundreds of thousands of jobs.
— The package of state support measures in this area includes subsidizing R&D (50 projects worth 11 billion rubles have been supported since 2022), reengineering grants (40 projects worth almost 2 billion rubles have been supported since 2022), Industrial Development Fund programs (92 projects worth 113 billion rubles have been supported since 2022), The ministry's press service told Izvestia.
What do car factories think
Over the past three years, after the flight of a foreign partner, AvtoVAZ has been able to fully restore broken supply chains and production of the entire marginal model range of cars, achieving technological sovereignty over them, the company's press service told Izvestia. During this time, production of the Vesta and Largus models was restarted, the Aura was launched, and assembly of the Lada Iskra started at two production sites (in Tolyatti and St. Petersburg).
— For the fourth year in a row, the company has been showing break-even financial results, updating the car model range, and increasing robotics. There are currently 1,600 robots in operation, 200 of which have been installed in the last three years. The domestic automaker also strictly fulfills all social obligations under the current collective agreement, the press service of AvtoVAZ reported.
Sollers, another major Russian automaker, is also expanding its model range and increasing its market share, completely redesigning its strategy after the departure of foreign partners.
— This year we launched the production of LCVs Sollers SF1 and SF5, minivans Sollers SP7 in Yelabuga and pickups Sollers ST9 in Ulyanovsk: all cars are manufactured using full-cycle technology. In 2026, we plan to start production and sales of the new Sollers S9 full-size SUV, LCV Sollers SF7, as well as updated UAZ Patriot, Pickup and Pro models. At the same time, we are actively working to increase the localization level of all products, which allows us to minimize dependence on external supplies. Despite the market decline this year, we continue to implement a large—scale investment program with a total cost of more than 35 billion rubles and are fulfilling all plans to localize the component base," the company's press service said.
Sollers also stressed that all production sites operate full-time, and the company fully fulfills its social obligations, preserving the workforce and ensuring stable employment.
It's difficult, but it's possible
The situation in the Russian automotive industry is really difficult, admits Igor Morzharetto, partner of the analytical agency Autostat. However, there are also positive trends.
— The most important thing that has been achieved is to preserve the industry, preventing the final shutdown of car factories after the sanctions imposed and the withdrawal of foreign automakers from Russia. Most of the enterprises have already been restarted, they produce Russian models. Of course, the market is still very weak, so these plants are not operating at full capacity. Nevertheless, the domestic automotive industry certainly has prospects," Igor Morzharetto told Izvestia.
The outgoing year was characterized by a surge in sales in October and November, spurred, among other things, by an increase in the recycling fee, said Maxim Kadakov, editor-in-chief of Za Rulem magazine.
— This has led to the fact that we are reaching 1.3 million [sold] new passenger cars by the end of the year. Yes, this is less than last year, but in fact it could have been even worse," he notes.
Despite the overall difficult situation, there is a certain stabilization or at least a hint of it in the heavy truck market, the expert believes. This allowed KAMAZ to enter a full-time working week, and the Russian auto giant from Tatarstan is looking quite confidently next year, he notes.
— An undoubted notable advantage of recent months is the launch of production of Tenet models in the Kaluga region. We see that they are being bought as actively as they were bought by Chery, on the basis of which they were created, this did not cause any rejection. It can be assumed that in the future, similar operations, if they are performed by someone, for example, Geely or Changan, will also be relatively painless. Yes, this will not affect the market figures as a whole. But such a smooth transition is probably better," Maxim Kadakov believes.
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