Lada automobiles stand in the parking lot of a Lada car dealership in Tolyatti, also known as Togliatti, on April 1, 2022. – For generations, the Russian city of Tolyatti has been synonymous with the maker of one of the country’s most recognizable brands – the Lada car. But as the West imposes sanctions on Russia over its military action in Ukraine, Tolyatti and the Avtovaz workers are bracing for hard times. Photo: Photo by Yuri KADOBNOV / AFP (Getty Images)
According to the Association of European Business (AEB), which represents foreign investors in Russia, Russian auto sales are in freefall due to pressure from international sanctions and the war.
The international community has strongly condemned the Russian invasion of Ukraine since troops first entered the country on February 24. Since then, foreign companies and investments have fled the country. The crashing debris and meteoric inflation certainly didn’t do anything to get the Russian public pumping for new cars, but even if they did, the country’s stock levels are low.
Not only people in Russia suffer from the lack of new cars. The decision to withdraw from the Russian market affects brands around the world. From CNN Business:
Just 55,000 new cars and light commercial vehicles were sold in Russia last month, down 63% from March 2021, according to data released on Wednesday by the Association of European Business (AEB), a group representing foreign investors represents in Russia, have been published.
All brands – European, American and Asian – suffered losses, but among the top sellers, Volkswagen was hardest hit, with sales falling 74%, followed by German brand Škoda and Toyota(TM). In February, overall sales fell just 4.8%, federation data showed.
Lexus, Toyota’s luxury brand, was also hit hard, with sales plummeting 91%, the largest of any brand. Porsche, also part of the Volkswagen (VLKAF) group, recorded a 73% slump in sales.
It’s not just your everyday brands like Toyota and Volkswagen that aren’t selling cars in Russia anymore; Ferrari and Lamborghini have also recently pulled out, with both luxury brands providing financial support to the people of Ukraine. Foreign automakers with factories in the country, such as France’s Renault, are shutting down production at Russian factories. Even Russian automakers like Lada are struggling to keep their doors open as the supply chain is disrupted by harsh sanctions.