“AvtoVAZ” significantly cuts Lada sales forecast amid falling demand in Russia
Russia’s largest car manufacturer, AvtoVAZ, has revised its plans for February 2026, reducing expected sales volumes by 15%, according to The Moscow Times.
The company’s CEO, Maxim Sokolov, admitted that even after this adjustment, current sales rates are insufficient to meet the planned trajectory. In January, the company managed to sell only 19,600 Lada vehicles, intensifying management’s pessimism about the market situation at the start of the year.
Sokolov cited a critical reduction in car financing as the main cause of the crisis, noting that two-thirds of potential buyers in Russia depend on loans. Despite a slight cut in the Central Bank’s key rate from 16% to 15.5%, banking conditions remain too strict, and loans are inaccessible to most citizens. In addition to high interest rates, the market is pressured by new tax rules and another increase in the recycling fee, which has driven up prices across the entire model range.
Currently, AvtoVAZ hopes to sell at least 20,000 cars by the end of February, but experts predict continued stagnation. The situation is further complicated by competition from Chinese brands, which are increasingly displacing Russian products even in the budget segment. Against the backdrop of falling real incomes and expensive loans, the company’s original production plan of 400,000 cars for 2026 looks increasingly unrealistic.
After three years of unexpected economic growth, Russia is facing a sudden slowdown — war expenditures, inflation, and falling oil prices are beginning to strain an economy that until recently seemed resilient to sanctions.
British intelligence notes that Russia’s demographic crisis is deepening due to the full-scale war against Ukraine, mass emigration, and significant combat losses. Kremlin efforts to stimulate birth rates are unlikely to halt population decline in the near future.
