Russia’s Two biggest auto manufacturers enter state of collapse

Russian Auto Industry in Freefall, as both AvtoVAS and KAMAZ Report Stunning Declines with KAMAZ 2024 profit down -96% and LADA March sales down -33% year-over-year and total auto market sales down -44%.

 Russia’s automotive sector continues plunging into crisis, with the latest figures confirming a steep contraction across the board. In March 2025, sales of Lada vehicles fell a further -33% year-on-year, down to just 28,699 units. Although marginally higher than February’s result, this slight uptick does little to offset the broader collapse.

According to AvtoVAZ, the manufacturer behind Lada, the overall Russian automotive market shrank by an alarming –44.4% in March alone, with no absolute figures provided. The situation is no better on a quarterly scale: Lada’s Q1 sales dropped -16.8%, while the entire market declined -24.8%.

AvtoVAZ attributes this sharp downturn to several factors: Russia’s high central bank interest rate, tightened lending standards, and the lingering glut of nearly half a million foreign vehicles imported in 2024. These excess stocks have triggered severe price dumping, compounding the industry’s woes.

Meanwhile, KAMAZ, Russia’s flagship truck manufacturer, is also reeling. The company’s 2024 profit collapsed by 28 times, plunging from over 20 billion rubles in 2023 to just 731 million rubles. On the sales front, truck purchases in Russia dropped –46% in February and –37% over the first two months of 2025. KAMAZ’s Q1 financials are expected to reflect further devastation.

These numbers confirm what analysts have long predicted: Russia’s economy is buckling under structural pressure, international isolation, and a declining consumer base. The auto industry, once a symbol of domestic industrial pride, now mirrors the broader stagnation and economic degradation unfolding across the country.