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Dragged down by weak end-user demand, Russian auto production declined year-on-year in the first half of 2025. KR R/A70 steel Major automakers anticipate a further sluggish market in the second half of the year and are considering shortened working hours. The government is implementing a new automotive industry development strategy to address these challenges.
Data shows that from January to June 2025, Russia produced 326,000 passenger cars, a 2% year-on-year decrease; truck production was 68,800 (-24%), and bus production was 4,700 (-37%). Although production rebounded month-on-month in June—45,000 passenger cars (+28%), 10,300 trucks (+16%), and 858 buses (+20%)—this was primarily due to a low base in May, when many automakers suspended or reduced production due to the holiday.
Downstream steel demand also weakened. It's estimated that the automotive industry consumed approximately 393,000 tons of rolled steel in the first half of the year, a year-on-year decrease of 21%.KR R/A70 steel This included 317,000 tons of flat steel (-20%) and 76,000 tons of long steel (-25%). June supply alone was 52,000 tons, a 23% month-on-month decrease. Flat steel fell to 43,000 tons (-10%), and long steel to less than 9,000 tons (-23%).
Sales continued to be under pressure. Data from the Ministry of Industry and Trade showed that passenger car sales in the first half of the year were 526,700 units, a year-on-year decrease of 26%. Light commercial vehicle sales were 48,800 units (-19%), trucks were 27,000 units (-54%), and buses were 4,900 units (-54%).
Automakers are generally cautious, even pessimistic, about the second half of the year. AvtoVAZ stated that due to weak consumer confidence, high interest rates, dealers' import inventory backlog (approximately 400,000 vehicles), and competition from foreign brands, the company may implement a four-day work week starting in September. Sollers, on the other hand, predicts a 30% market contraction for the full year. KR R/A70 steel Vice President Zoya Kaika admitted, "The lack of financial tools (such as auto loans and leasing options) is severely suppressing consumption. June's sales figures are worrying, indicating that the market has not yet bottomed out."
To cope with the industry's difficulties, the Russian government is working on updating its automotive industry development strategy and plans to issue a proposal before the end of November. The content will cover improving labor productivity, reducing production costs, strengthening local production, improving national support policies, and opening up export channels.
