AvtoVAZ revealed a fresh price surge for its vehicles, citing escalated manufacturing expenses and VAT.
AvtoVAZ is gearing up for another surge in vehicle pricing, as declared by company CEO Maxim Sokolov at the “Transport of Russia” forum. This determination contrasts with Vladimir Putin’s pledge from two years prior, stating that the cost of locally manufactured vehicles would eventually diminish.
Sokolov clarified that the prior indexation occurred nearly a year ago, registering less than 2%, markedly below the inflation rate. He conveyed that maintaining prices at this level is no longer tenable, due to a growth in imports, amplified dumping practices by Chinese producers, and continuous escalation of manufacturing expenditures. “Prices must shift to reflect actual manufacturing expenses,” TASS reported his statement.
An added element will be the VAT increase from 20% to 22%, which will automatically inflate manufacturer costs by a minimum of 2%. Inflation, augmenting component prices, and the overall weakening of the economic state within the sector will also have an influence.
The price augmentation will perpetuate the trend that commenced after February 2022. At that juncture, the interruption of supply networks and the departure of Western automakers prompted a substantial surge in vehicle expenses within Russia, including AvtoVAZ’s own offerings. In December 2023, Putin acknowledged the price escalation, attributing it to the swelling expense of imported parts, but also affirmed that prices would contract with the advancement of domestic platforms.
Nevertheless, since then, AvtoVAZ has already elevated prices on three occasions—twice during 2024 and once in January 2025. Concurrently, production and sales are decreasing: in September, Sokolov communicated a cut in the production schedule from 500,000 to 300,000 Lada automobiles annually.
An additional catalyst for price appreciation will be the government’s projected increase in recycling levies effective December 1. In anticipation of this action, the expense of new vehicles in Russia has already attained an unprecedented peak.
