AvtoVAZ sales surge in Russia by 30%
AvtoVAZ, Russia's leading automaker, reported that it held a 28% share of the domestic market in car sales during 2024. The company sold and delivered nearly 525,000 vehicles to dealers, achieving a production milestone of 525,600 Ladas. This figure represents a 40% increase compared to the production plan of 500,000 units, marking the highest production volume in the last decade.
However, President Maxim Sokolov revealed plans to revise AvtoVAZ's 2025 production plan of 500,000 cars, citing potential sales slowdown due to economic struggles, such as rising interest rates, a strong dollar, and stricter credit conditions. He plans to monitor the market balance closely and adjust the plan accordingly at the beginning of 2025.
In Russia, a total of 1,570,000 new light vehicles were sold in 2024, a 48.4% increase from the previous year, marking the highest figure in the past five years. Despite a marginal decrease in market share to 27.7%, Lada retained its leadership position. Haval followed closely, selling 190,600 units, while other prominent brands such as Chery, Geely, and Changan recorded sales of 157,000, 149,100, and 106,100 units respectively.
Economic volatility, market saturation, reduced road freight prices, and localization challenges may have contributed to the anticipated sales decline in 2025. The increased supply of used cars with modern features, especially from China, could further intensify competition, pressuring domestic manufacturers such as AvtoVAZ. As such, the automaker might need to produce fewer vehicles or adapt its product offerings to respond to shifting consumer preferences and competitive pressures.
In light of economic struggles like rising interest rates, a strong dollar, and stricter credit conditions, AvtoVAZ might need to realign its finance strategy for the production of lifestyle vehicles in 2025, potentially modifying its production plan to meet market demands. With the influx of affordably priced, high-quality used cars from brands like Haval, Chery, Geely, and Changan, the Russian finance industry may witness a shift, impacting the sales of domestic brands such as AvtoVAZ and their car offerings.
