One of the world's largest countries has seen a slump in demand for new cars, with sales across the market dropping 45% over the past 12 months. According to new figures from the Association of European Businesses (AEB), just 83,000 new cars were sold in Russia during March 2025, with similar reductions faced throughout the entire first quarter of the year.

Speaking to the automotive publication Motor1, Alexy Kalitsev, Chairman of the AEB, the slump in sales may require support from the Russian Government. He explained: "The continuation of the current trend may lead to a crisis in the industry, which will require urgent support from the state. Some previously departed companies would return to the Russian market, increasing the volume of deferred demand, which in the future may lead to growth."

The decline in new car sales during March 2025 marks the third-worst contraction for the Russian market in the past decade, with the 2015 financial crisis and the unlawful invasion of Ukraine in February 2022 also resulting in a slump in demand.

One of the main reasons why so few Russians are currently buying cars is due to the increasing number of manufacturers which no longer import models to the sanction-hit country.

World-famous brands, including Ford, Toyota and Mercedes-Benz, all pulled out of the market at the start of the illegal war ordered by the Kremlin against the Russian neighbour, whereas other companies took measures such as ending production of vehicles at their Russian factories.

The domestic car industry that remains in Russia has also been put under increasing financial pressure from the rising number of sanctions being imposed by other countries.

AVTOVAZ, the Russian state-owned company who produces Ladas, is currently the country's largest carmaker. During March 2025, the manufacturer sold 28,699 cars and light commercial vehicles - an increase of 7.4% compared to February 2025; however, this still marks a decline of 33% in 12 months.

Nevertheless, the Lada Granta remained the best-selling model of the month in Russia, with 11,767 examples sold, and the company's flagship model, the Vesta, ranking second.

In a bid to increase demand, a number of the remaining car companies in Russia have imposed significant discounts on their models.

Some Chinese manufacturers, who are generally the largest imported car sellers in the country, have slashed prices by as much as one million rubles (£9,174).

Russian media has reported that AVTOVAZ officials have accused the Chinese car industry of 'dumping' models on the market, with a significant amount of the 500,000 vehicles imported from China to the country during 2024.