They clicked on "restart": how localization makes the car market stable

Due to the sanctions imposed in 2022, the Russian automotive industry has become one of the most affected industries. Factories owned by foreign companies have stopped. However, by 2025, it was possible to restart almost all previously abandoned sites and launch the production of cars under new brands. The increase in localization contributes to the trend towards sustainability and market growth, experts say. Izvestia investigated whether cars will become more affordable and what awaits the market in 2026.

The car industry is working

According to the results of January-December 2025, the market for new cars of domestic production exceeded 831 thousand units, which is only 0.2% more than a year ago, the press service of the Ministry of Industry and Trade told Izvestia.

The share of sales of Russian equipment by the end of 2025 increased by 11 percentage points compared to the same period last year and reached 56%, the department noted. In December, sales of vehicles manufactured in the Russian Federation increased by 22.6% to 92.7 thousand units, which is 22.6% more than in December 2024. Their share has almost reached 60%.

Changed the approach

This was achieved thanks to the reopening of almost all Russian car companies. Since 2022, more than 80% of the production facilities abandoned by former partners from unfriendly countries have been restarted.

At the same time, the principled approach to working with new foreign partners was revised. For all the abandoned sites, Russian investors were found, who now have control over the joint ventures. In case of force majeure, the rights to modern technologies in the automotive industry created or developed here, as well as to design documentation, will remain in Russia.

At the same time, the automotive component industry is being 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). These are also grants for reengineering, which supported 40 projects worth almost 2 billion rubles, and the programs of the Industrial Development Fund — 92 projects worth 113 billion rubles were supported. As a result, half of the 740 critical positions that Russia has identified for itself in 2022 have already been closed by domestic production.

Demanded by the market

None of the automotive industries will be limited to the so-called "screwdriver assembly", restarts are carried out under special investment contracts (SPIC), which provide for obligations to deepen localization. In particular, Evolute announced that they will use Russian chemicals when painting their hybrids and electric vehicles.

In Kaluga, at the former Volkswagen site, a full-cycle production of Tenet-branded Russian cars was established, including welding and painting, and Sollers promptly adapted the released capacities for its own brand cars. The assembly of Voyah premium serial hybrids has begun in the Lipetsk Region. Avtotor is working with several technology partners.

Currently, cars of more than 20 brands are produced in Russia in the passenger segment alone — sedans, crossovers, SUVs, pickups, electric vehicles and sequential hybrids.

The new localized brands proved to be in demand by the market. Kaluga-built Tenet brand cars were among the top three bestsellers on the market in December, while another localized Solaris brand took ninth place.

According to the Autostat agency, the three leaders of the electric vehicle segment include the Russian brands Amberauto and Evolute.

Voyah hybrids (also manufactured in Russia) took the second place in the Russian market of electric cars and hybrids (NEV) with a share of 15.9%. Total sales totaled 9,465 vehicles (+5.9% compared to last year), while December was a record month (1,590 vehicles). The Voyah representative office called the December sales "one of the best results in the entire history of the brand in Russia."

Seven out of ten best-selling brands produce cars in Russia in one way or another. Great Wall, the most popular foreign automaker in Russia, has a factory in the Tula region. The company is heavily dependent on the Russian market, which accounts for almost 40% of sales outside of China, according to Autostat.

"Regarding the availability of domestic cars, we always pay attention to the fact that the adjustment of recycling does not have a significant impact on their cost, since we provide our manufacturers with a range of industrial subsidies," said Anton Alikhanov, head of the Ministry of Industry and Trade.

They are looking at the factories

Although enterprises had to adjust production plans for this year, a slight decrease in output was not critical, the head of the Ministry of Industry and Trade noted. The remaining sites will be launched in 2026. The former General Motors plant in St. Petersburg was abandoned back in 2015. It was refitted from scratch, and starting next year, full-cycle car production will be launched there. Negotiations with investors on sites in Shushary and Nizhny Novgorod are in the final stages.

— Even the upcoming changes to the mechanics of waste collection calculations, which we announced in advance in September, gave a tangible impetus to the intensification of negotiation processes on the part of our new foreign partners. We know that over the period since the publication of the draft act, three brands have visited one of the production sites at once, precisely "looking closely" at the possibility of overloading capacities with the production of their own models," said the head of the Ministry of Industry and Trade.

Interest in long-term presence

Among a number of stable positive trends in the industry, Irina Frank, CEO of Frank Auto, was the first to name an increase in the localization of car production in Russia. In her opinion, this reduces dependence on imports and creates the basis for a stable supply.

— Localization will continue, and Chinese manufacturers are already actively present and developing their participation in our market. We are witnessing a systematic movement towards local assembly and adaptation of products to Russian conditions, reflecting a strategic interest in a long-term presence. A number of brands are already producing or planning to produce cars with Russian assembly. This is due to the growing share of such cars in sales, incentives through government regulation, and the vision of Russia as a stable market with a growth perspective. Localization strengthens the position of Chinese brands, allowing them to be more stable and competitive,— said Irina Frank.

The second positive trend is the expansion of the model range and the growth of competition in the mass segment, which gradually returns the focus to the buyer, Irina Frank added. She considers the smooth transformation of brands to be the third one. The usual foreign and Chinese brands are changing the format of their presence. The outgoing ones are being replaced by new localized brands adapted to Russian conditions.

The increase in recycling rates and the change in the calculation methodology have become a significant incentive for the deployment of production in Russia, said Ilya Petrov, Director of Retail Sales at Avilon AG.

— According to our estimates, this process will continue in 2026, which makes the market more resilient to logistical and currency fluctuations. The market is increasingly shifting towards local and Chinese brands while maintaining limited volumes of parallel imports, which can be seen as confirmation of the long—term interest of Chinese manufacturers in the Russian market," he said.

Cars will become more accessible

The gradual growth of localization volumes and the development of own production will create conditions for price stabilization and increased availability of cars, said Mikhail Khachaturian, Associate Professor of Strategic and Innovative Development at the Financial University.

— Import substitution and factory restart ensure, first of all, the development of the technical and technological base of car production in Russia, create conditions for the emergence of their own brands that can impose competition on car brands from friendly and neutral countries. The growth points in 2026-2027 are likely to be the gradual introduction of new brands and models from localized manufacturers to the market," he believes.

Such aspects as increased localization, while maintaining preferential lending and leasing programs, as well as price competition between automakers, can create conditions for sustainable growth of the Russian automotive market, experts summarize.