Russian car sales collapse as Ukraine war leads to supply, price shocks

Kazakh cars

With new cars hard to find in Russia and accelerating inflation threatening to devalue their savings, some Russians have turned to neighboring markets that have remained open to them.

Russian customers accounted for about 10 percent of sales at Autodom in the Kazakh city of Kostanay, 180 km (110 miles) from the border, according Yevgeniy Biber, the dealership’s sales chief.

Previously, they made up about 1 percent of buyers, he said.

Even before the crisis, Russia was already battling a deficit of new cars due to supply chain disruptions and distribution delays that the automotive industry has contended with globally.

Russian new car sales last year were down nearly 50 percent from their peak in 2012 as the economy stagnated since the 2014 annexation of Crimea from Ukraine.  

Amid a dearth of parts needed to keep factories open, Interfax reported that AvtoVAZ plans to introduce a stripped down version of its Lada brand made with a minimum of foreign parts such as airbags and anti-lock brake systems.

Vehicle sales in March were among the worst in the last 15 years, according to Azat Timerkhanov of Russia’s Autostat consultancy.

“If Europe doesn’t restore deliveries, China will be the main beneficiary, at least in terms of market share,” Timerkhanov said. “But volumes are going to continue to fall.”