The Russian automotive market faces a significant drop in demand for car loans.
Photo: Natalia Mushchinkina
The current trends in the Russian automotive market offer little optimism. In the first half of 2025, the volume of auto loan issuances nearly halved compared to the same period in 2024, reaching 570 billion rubles. Furthermore, warehouses have accumulated between 600,000 and 700,000 unsold vehicles, a figure also twice as high as last year. Despite state support programs, the industry struggles to overcome a period of low demand, further exacerbated by a shortage of components and rising costs for insurance, spare parts, and vehicle maintenance.
«Approximately 455,000 car loans, totaling 570 billion rubles, were issued in the first half of 2025, whereas the same period last year saw over 800,000 loans amounting to 1.2 trillion rubles,» stated Oleg Lagutkin, CEO of Scoring Bureau. He attributed this decline to ongoing structural changes in the industry, insufficient demand, and the limited impact of reduced interest rates.
Since January, the average weighted interest rate for new car loans has fallen by 7 percentage points, reaching 13.6% annually in June—the lowest since 2023. For used cars, the rate stood at 28.2% (a decrease of 0.5 percentage points). Nevertheless, dealers continue to report a severe issue of overstocked warehouses, a scale comparable only to the 2008 crisis. Car loan delinquencies are also increasing; currently, 32,000 borrowers have payments overdue by 90 days or more, marking a two-year high.
«The sharp decline in auto lending occurred at the beginning of 2025, with an average of about 65,000 loans issued per month during the first three months. Subsequently, the trend improved, reaching nearly 90,000 by June,» explained Nikita Maslennikov, a leading expert at the Center for Political Technologies. He recalled that in August-September 2024, Russians actively sought car loans, anticipating a substantial 70-85% increase in the recycling fee from October 1st. This marked a turning point, significantly affecting the market structure and the balance of supply and demand. Russian consumers` lending activity diminished, with many abandoning plans to purchase cars in 2025, choosing instead to wait for price reductions and preferring to deposit their funds in high-interest bank accounts.
Furthermore, the Chinese car segment experienced an increased shortage of components, and approximately one-third of dealership companies faced revenue declines. Around 200 auto dealerships have closed since the start of the year. Nevertheless, June 2025 showed a somewhat positive shift: the number of loans issued rose by 11% compared to May, and their total value (in monetary terms) increased by 15%. This growth in demand is likely driven by two government-subsidized programs: «Family Car» and «First Car.»
— Can the market recover to at least the levels of the first half of 2024?
Experts assess the prospects with extreme caution. The situation will largely depend on the pace of key interest rate reductions, the effectiveness of state-subsidized loan programs, and initiatives for localizing imported vehicle production. Currently, Chinese brands account for 59% of new cars sold in Russia, which does not benefit the domestic automotive industry. It remains unclear what will happen with the enormous number of unsold vehicles and how long it will take to resolve this issue.
— What is happening with prices, what are the trends?
Car prices are generally stable, and for some brands, they are even decreasing. Chinese brands, at least, are not becoming more expensive due to the strong ruble. However, this is a temporary phenomenon: if the dollar exchange rate reaches 87-90 rubles by year-end, it will lead to a significant cost increase. Regarding the consequences of the increased recycling fee, this measure initially led to a higher price ceiling, but not a catastrophic one. Subsequently, there was some deceleration in price growth, and even a rollback for certain models. It is clear that the current situation is incomparable, for instance, to the realities of 2021, when cars, including Western brands, were much more affordable for Russians. However, the price environment in 2025 is quite adequate for the current state of affairs in Russia: it reflects a sharp deterioration in market conditions, challenges with logistics, international payments and settlements, and the currency exchange rate.
