Expectation vs reality
In a newspaper interview, Sergei Kogogin, the general director of KamAZ, stated that Moskvich ended 2023 with a loss of 160 million rubles. Vedomosti reports that Moskvich serves as the technological partner of the Russian automobile plant.
The breakeven production level, as explained by Kogogin, is 40 thousand cars per year for Moskvich. He also acknowledged that pursuing the previously announced goal of manufacturing 50 thousand vehicles in 2024 would not align with the Moscow plant’s current capabilities.
“No, because it is absolutely not necessary. The break-even level is reached by 40 thousand cars per year. We are targeting 30-35 thousand vehicles this year,” he stated.
From these figures, there is a risk that Moskvich will remain unprofitable in 2024.
The auto factory has repeatedly adjusted its production plans for 2024. In August, the announcement indicated a target of 44 thousand cars. Moskvich’s production director Oleg Maslyakov noted in late November 2023 that the production plan for 2024 was set at 50 thousand vehicles.
At Moskvich, the Moskvich 3 gasoline crossovers with manual and CVT transmissions, the Moskvich 3e electric crossover, and the Moskvich 6 liftback are assembled using a large knot method.
The plant also announced that in coming months it would begin small-unit assembly of the Moskvich 3 model with welding and body painting. The cars will be built from more than 900 components, compared with around 50 components and parts currently used.
As Kogogin noted, the shift to small-unit assembly will require an additional investment of 4 billion rubles, to be provided either through equity financing or bank loans. Small-unit installation is expected to save about 150 thousand rubles per car.
Who buys Moskvich?
In 2023 Moskvich produced 31 thousand cars, and less than half were sold — about 13.5 thousand units. Another 19 thousand were sent to dealers. The share of government purchases is around 10 percent, according to the analytics firm Avtostat citing the plant’s press service.
In March 2023 the first Moskvich cars joined the traffic police fleet, notably the Moskvich 3e electric vehicle serving in Lyubertsy near Moscow.
In July 2023, Moscow units of the Russian Guard received a hundred new Moskvich cars. The vehicles were also deployed by the Federal Penitentiary Service and widely used in the capital’s taxi fleets. For example, the Moskvich 3 crossover is listed in Yandex.Taxi under the Comfort category.
Together with other brands officially represented in Russia, Moskvich has been using promotions to attract buyers. From late February, discounts were offered on liftbacks Moskvich 6 and the gasoline Moskvich 3 in the top configuration, with discounts of 200 thousand rubles. The other three versions of the crossover carried discounts of 100 thousand rubles.
In the first half of 2024, Moskvich plans to expand its lineup with the larger Moskvich 5 crossover, while the D-segment Moskvich 8 is expected later in the year.
What prospects lie ahead for Moskvich?
Oleg Moseev, founder of Automarketer, observes a notable gap in the range. He notes the absence of a mass-produced budget sedan within the 1.5–1.7 million ruble range, and he suggests that factory-made crossovers are not yet meeting demand as a mass-market project.
“There is little doubt Moskvich will reach about 35 thousand cars in 2024. On one hand, it is good the plan is modest. Yet production figures alone do not tell the full story; sales matter just as much. Their own data show roughly 15 thousand annual sales, while independent estimates put it close to 13 thousand,” Moseev said on socialbites.ca.
Early marketing missteps and dealer-relations challenges gave way to improvements. Moseev believes the brand will likely sell at least 30 thousand cars this year. He adds that price adjustments and expanded body painting options could boost profitability, and that a broader model range helps. If sales exceed 30 thousand, profitability is more plausible next year.
Independent automotive consultant Sergei Burgazliev argues that the current Moskvich lineup, centered on two main models, appears weak and that strategy and marketing are not clearly communicated to dealers and other market participants. He notes Moskvich’s heavy reliance on Chinese components and points out that decision-making can be slow when the Moscow authorities and KamAZ share control of the asset. Burgazliev also notes that the lineup is limited and that, compared with competitors, pricing, design, and technology leave room for improvement. Still, he regards localization of production as a positive move. He adds that owners acquired Moskvich almost free, so a yearly production of 40–50 thousand could be enough for basic payback.
“If Moskvich does not ramp up production, long-term prospects become difficult to discuss. Moskvich has work to do,” Burgazliev concludes.