As the backlash against Russia’s actions in Ukraine starts to bear consequences, sales of new cars fell by almost 63% in Russia in March compared to the same month a year earlier, according to data out Wednesday from the Association of European Businesses (AEB), a group representing foreign investors in Russia.
The numbers mark a significant and sudden decline in the Russian car market, as foreign companies have pulled out, parts shortages have led to work stoppages at factories, and the collapse in the ruble has sent the price of a new car soaring. AEB numbers show that sales fell by only 4.8% in February.
A number of foreign carmakers stopped operations in Russia in March and banned vehicle exports to the country. Volkswagen suspended production at its two plants and banned exports. Ford stopped operations at its joint venture and Renault, which owns Russian carmaker Avtovaz, recently said it was suspending all activities at its Moscow factory, and “assessing the available options” regarding its stake in Avtovaz.
Avtovaz, whose Lada brand represented nearly 21% of the car market in Russia in 2021, is facing severe parts shortages. The company has brought forward a company-wide summer vacation to April, and announced it will move to a four-day week for three months from June to try to save the jobs of its more than 40,000 employees. The company says it is also designing new versions of several Lada models to be less reliant on imported parts.
Meanwhile, the average price of a new car in Russia rose by 35-40% in March, according to Russian car market analytics website Avtostat.