Russia expects a drop in domestic car sales due to the end of loan programs

Production and sales at Russian auto giant AvtoVAZ could drop by 20–25% by the end of the year due to the termination of government subsidy programs and preferential auto loans, according to the Russian Ministry of Industry and Trade.

The 20 billion rubles allocated in the Russian budget for preferential loans and the 30 billion rubles for leasing were fully exhausted in September, and no additional funds will be allocated due to the budget being strained by military expenditures. The end of state support will hit AvtoVAZ the hardest, as its share of the Russian market has already fallen to a critical 24 percent, since the company lacks the resources to engage in price wars with Chinese automakers.

Source: The Moscow Times.

As a reminder, consumer sentiment in Russia is rapidly deteriorating, confidence in the economy is declining, and anxiety is rising. This was reported by the Foreign Intelligence Service of Ukraine. Consumer lending in Russia has fallen to a six-year low.

After three years of unexpected economic growth, Russia is facing a sudden slowdown—war costs, inflation, and falling oil prices have begun to weigh on an economy that, until recently, seemed resilient to sanctions.