According to industry observers, a number of Russian car dealerships could face bankruptcy in 2024. Izvestia cites Vyacheslav Zhigalov, who serves as deputy chairman of the Russian Association of Automobile Dealers (ROAD), in casting light on the pressure building within the sector.
Zhigalov notes that the 2024 demand target set by manufacturers is ambitious, totaling almost two million cars. He explains that dealers cannot alter or reject the agreed sales plan. If a seller declines the manufacturer’s terms, the contract can be terminated without cause, a move that may push some businesses toward bankruptcy. This dynamic underscores how closely dealer performance is tied to the terms dictated by automakers and the potential risk for those who cannot meet the ongoing production and pricing expectations.
Industry data from Autostat indicate an accumulation of Chinese-made vehicles in dealer inventories, with a surplus reaching about 175 thousand units. To meet the sales plan, dealers may be compelled to offer additional services or incentives to attract buyers, reflecting a broader trend of retailers seeking to differentiate themselves through value-added offerings rather than price alone.
Earlier remarks from an official with the Ministry of Industry and Trade suggested a rebound could take hold in the Russian automobile market, with projections indicating sales could climb to around 1.3 million units in 2024. The ministry also outlined a long term horizon: by 2026, annual sales would align with the average levels seen from 2015 to 2021, followed by a gradual, roughly 1 percent year-over-year growth starting in 2027. If these projections hold, the market could reach about 1.8 million vehicles per year by 2030 and near 1.9 million by 2035, signaling a steady, albeit measured, recovery trajectory after the recent volatility.
There have also been reports about the reactivation of a former PSMA Russian automobile factory in Kaluga, a development that could influence regional supply dynamics and capacity utilization in the broader market landscape. Such moves illustrate how policy signals, manufacturing incentives, and corporate decision-making converge to shape the pace at which domestic demand and production align again with pre-crisis levels, even as external pressures continue to loom over the sector.1