Car sales in Russia to record low, Putin wants more price controls

Since records are kept, there have never been so few cars sold in Russia in one year. It is nothing new that things are going badly for both the market and the industry there. Today we will find out how bad things are. Maxim Sokolov, the CEO of Avtovaz (one of the biggest players in the Russian car industry), predicts total sales of between 670,000 and 700,000 cars. That is much less than in the second worst year of the Russian car market, when more than 1 million cars were sold, writes the Reuters news agency.

There is now a drop in sales of more than 60 percent. For comparison: in 2012, more than 3 million cars rolled out of Russian showrooms in a year. The sanctions that followed the annexation of Crimea in 2014 already caused the first difficulties, according to Reuters. Although Russian car manufacturers are doing their best to keep production numbers high, the Western sanctions introduced this year make that quite difficult. For example, Ladas were recently built without airbags, because the parts from abroad were simply missing.

Fewer customers through mobilization

It’s not that low car sales are just because the industry has collapsed and many Western manufacturers have left the country. The patronage is also gone. Purchasing power in the country has fallen sharply since the start of the war in Ukraine and the prices of cars have risen – as have the prices of all kinds of other products. In addition, there are by definition fewer customers due to mobilization.

To prevent cars from being priced disproportionately higher, Putin himself is now getting involved. He is urging his government to impose price controls on the car industry. To reassure Putin, Denis Manturov, the country’s trade minister, reported that the established names in the industry – with or without the help of subsidies – are pulling out all the stops. And that Moskvitch will start producing cars again at the end of this month …