The average age of a car on Russia’s roads has reached 16 years. Import substitution efforts have pushed prices up for all vehicles, and even Chinese-made models are becoming unaffordable. New car sales in the country are down by double digits, while the market for used cars holds steady. In yet another blow to the Russian auto industry, consumers are choosing used Western-brand cars over domestic and Chinese options, further reducing tax revenues and limiting the growth of the Russian economy.
A country of aging cars
The Russian car market is becoming increasingly secondary. Sales of new cars are dropping at double-digit rates, major manufacturers are switching to shortened workweeks, and dealer networks are downsizing. So what are Russians buying? More and more often, they are opting for used cars: in August, 553,000 pre-owned vehicles were sold, and from January to August, sales topped 3.8 million — a figure fully in line with that of previous years.
This shift toward used cars reflects a broader trend: having lost access to Western technology and investment after the start of the full-scale war in Ukraine, Russia is transforming into a country of aging vehicles. The share of new cars (under three years old) is steadily shrinking: at the beginning of 2022, the average age of passenger cars on Russian roads was 14 years, but by mid-2025, it had already reached 16. Around 35 million out of the 46 million cars that Russians use for regular transportation are over 15 years old.
Foreign old-timers
Imported cars are also arriving in the country at an increasingly older age. From January to July 2025, about 229,000 used vehicles entered Russia(+6.5% year-on-year). Japan remains the largest source of used cars, accounting for more than 46% of imports in July, followed by South Korea with 22%. These two markets provide a wide range — including relatively recent models (3-5 years old), but also a significant volume of cars over ten years old.
Since the start of the full-scale war, China has become another important source of used cars. Its share rose from 3% in 2023 to 16% in July 2025. Unlike Japan and South Korea, where there is a broad mix of models and ages, Chinese exports are narrower and more targeted. Russia is mainly receiving three-year-old vehicles — either Western brands produced at Chinese factories (Volkswagen, Toyota, BMW, and others) or relatively recent Chinese models (Geely, Changan, and others). This structure makes imports from China especially attractive: the cars are comparatively new, they meet modern environmental standards, and the Chinese-made Western brands retain high resale value.
As a result, a new model of fleet renewal is taking shape in the Russian market. Before the war, many new cars coming from a range of producer countries found their way onto Russian roads. Now, however, the main additions are used vehicles from Asian markets, and with international sanctions locking the domestic auto industry in a state of technological stagnation, the country’s dependence on foreign suppliers is only growing.
Tellingly, nine Western brands — and not a single Chinese one — made it into the top 10 best-selling used cars in Russia in the first seven months of 2025. Despite Chinese models’ dominance in the new car market, the relative paucity of such sales means that the age of the overall fleet continues to rise.
New Chinese cars losing popularity
In 2023–2024, new Chinese cars were the main driver of recovery in the Russian auto market. However, from January to July of this year, overall sales of new cars fell by 24% year-on-year (to 651,000 vehicles), and the decline in the Chinese segment was an even sharper 27% (to 326,000 cars).
Even the FSB bought a Hongqi E-HS9 crossover in 2023
There are several reasons for the decline in interest. First, more expensive car loans and cuts to subsidized programs have made purchases less affordable, reducing demand. In addition, car prices themselves have gone up. For the average buyer, even Chinese cars have ceased to be a budget-friendly alternative to the departed European brands: the average price of a new Chinese car has already exceeded 3.5 million rubles ($41,420), 13% higher than the national average in Russia and more than double the average price of a domestic model.
Thus, Chinese brands’ key competitive advantage — affordability — is gradually eroding. For the same amount that dealers are asking for a new Chinese crossover, Russian consumers can buy a three- or four-year-old Japanese, Korean, or European make (often produced in a Chinese factory). This reality is further driving demand into the used car market.
Prices are also being pushed up by the rising utilization fee, which is paid when registering a car. The state partially compensates manufacturers for this cost depending on the level of localization of production. Today, the utilization fee for the most common type of car (with an engine up to 2 liters) is 668,000 rubles ($7,905). However, instead of full-scale localization, Chinese automakers — with few exceptions — continue to import vehicles from China, passing the costs on to the end consumer.
In 2024, more than one million Chinese cars worth $21 billion were imported into Russia. On one hand, their sale brought significant tax revenue to the budget. But on the other, it created an imbalance in the market in 2025, as Russian carmakers faced overflowing warehouses, forced production cuts, and falling sales.
Chinese brands are also suffering. With inventories piling up, they have been forced to offer discounts of up to 1 million rubles ($11,800). While the authorities look for ways to force Chinese companies to localize production (like introducing targeted bans on imports of certain models), Russian producers are pleading for new subsidies. Meanwhile, consumer demand continues to shift to the secondary market, where the range of established Western brands appears more reliable and often more cost-effective than new vehicles made in Russia.
The Russian car as a compromise
Along with declining sales, production at Russian plants is also stagnating. The country’s total production capacity is around 3 million cars per year, and yet from January to July 2025, fewer than half a million vehicles rolled off assembly lines. Market trends, combined with the long-term impact of sanctions, have forced Russian manufacturer AvtoVAZ to cut its annual target for 2025 by about 20% (to 400,000 cars) and to postponed the mass launch of a new model.
Mass production of the new Lada Iskra sedan has been put on hold
The story is similar elsewhere in the country. Moskvich produced about 8,000 vehicles in the first half of the year, compared to an initial target of 120,000 for the full year, and its new model effectively flopped on the market. In the first two weeks, only one car was sold.
The situation is no better at the key sites once owned by Western automakers, which in 2024 produced output at around 10% of total capacity. The former Nissan plant (now Avtozavod Saint Petersburg) cut its 2025 production target threefold (to 6,500 cars), recently suspended the launch of a new model, and sent staff on a three-week leave. The former Toyota plant (Shushary Auto in Saint Petersburg) has been idle since March 2022, racking up multimillion-ruble losses. The former General Motors factory in Shushary also stands idle, though it is preparing to launch production of Chinese models.
However, the former Hyundai plant in Saint Petersburg and the former Volkswagen plant in Kaluga, now part of AGR Holding, are showing growth: in the first half of 2025, the Saint Petersburg site produced 18,300 cars (+74.3%), while the Kaluga site launched a second model in partnership with a Chinese manufacturer. Still, they are far from reaching design capacity. A similar situation exists at the former Mercedes-Benz plant (Automobile Plant of the Moscow Region), relaunched in July 2024 with a Chinese partner.
The new owners of these plants have ambitious plans, but they are constrained by a limited business model — expensive large-unit assembly with gradual introduction of more complex operations (stamping, welding, body painting, and so on). This setup prevents them from competing on cost or quality — not only when going head-to-head with domestic maker AvtoVAZ and various Chinese imports, but also with the Tula region’s highly localized production facility for Haval, a Chinese company which also has ambitious expansion plans in the Russian market.
At the same time, the Chinese cars produced at local assembly facilities raise concerns among industry analysts and car owners alike. They are regularly subject to large-scale recalls due to safety or software issues, are often poorly adapted to Russia’s climate, and lag behind European and Japanese counterparts in reliability. A trend is already emerging in which Russian dealers refuse to sell certain Chinese brands, and cases of mass closures of dealerships representing Chinese manufacturers have also been notable.
Service support for Chinese models also remains limited: many dealers are reluctant to honor warranty claims, and delivery of spare parts from China can take months, forcing owners to choose between a legal dispute and a costly out-of-pocket repair bill. As a result, operating such cars brings not only higher expenses for consumers but also rapid depreciation — within a year they lose up to half of their value.
Overall, Russian consumers are increasingly turning to the secondary market, where proven models with stable resale value are available at a price comparable to that of a new Russian-made car. This shift in demand portends long-term negative consequences for the economy, as the resale of used vehicles does not create added value, does not generate significant tax revenues (for example, from the utilization fee), does not stimulate new investment in the modernization of production facilities, and does not lead to the development of related industries.
Meanwhile, the flow of demand into the secondary market accelerates the aging of the car fleet, raises consumer costs for maintenance and repairs, and lowers road safety. If these trends persist, the Russian auto industry risks ceasing to be a driver of industrial development and will function primarily as a mechanism for redistributing the existing car fleet.