Overview of Russia’s evolving automotive landscape
Moscow plans to establish its own automotive cluster to advance the creation of proprietary platforms for future electric vehicles from the Moskvich plant. This vision was shared by the city’s mayor during a meeting with President Vladimir Putin. Amid sanctions and the halt of foreign parts supply, Russia’s auto industry faces challenges in producing modern cars. Some factories, including AvtoVAZ, GAZ Group, UAZ, Sollers, and KamAZ, have had to restore production to earlier levels as the sector adapts to new realities.
As a result, models such as Lada Xray have been removed from AvtoVAZ’s lineup, and the Vesta, built on a domestic platform, is expected to be recommissioned at the main plants in Togliatti. Lada Granta has received simplified versions, and UAZ is offering cars with Euro-0 engines along with full equipment packages. Domestic factories are actively preparing to launch new models under the changing conditions.
AvtoVAZ in St. Petersburg has announced the acquisition of the former Nissan plant from NAMI, confirming plans to start producing C- and D-class cars. In 2023, the aim was to produce 10,000 vehicles with localization involving around 30 regional component suppliers by 2027, and to grow annual output to 50–70 thousand units.
Kaliningrad’s Avtotor continues to upgrade its facilities, starting assembly of Chinese Kaiyi sedans. Previously, the enterprise founder Vladimir Shcherbakov stated plans to begin electric vehicle production in 2023, targeting 50–60 thousand electric cars annually.
E-Neva, an electric vehicle developed by the Almaz-Antey concern, is also expected to receive an electric drive. A prototype of a C-class crossover from this organization was shown to President Putin during a January visit to St. Petersburg.
path of least resistance
Compared with building a domestic platform, localization of a foreign model is seen as a cheaper, more straightforward option. Yet this approach may still be unprofitable due to the sheer number of vehicles and components produced in China, which keeps per-unit costs low, notes independent automotive consultant Sergey Burgazliev.
Localization becomes viable at about 45,000 vehicles per year for a single model. Engine localization requires volumes above 110–120 thousand cars annually, while body parts require around 70 thousand. If production is smaller, the cost advantages favor manufacturers that produce millions of cars in China, Burgazliev explains. Localized component supply in Russia could include tech lists, tires, plastics, rubber products, stamping, casting, pistons, and rings.
He highlights that Kaliningrad Avtotor made a prudent choice by assembling Chinese Kaiyi vehicles, which are expected to be in demand due to limited alternatives and strong model characteristics. When it comes to a national platform, there is little domestic expertise available, implying high costs—estimated at 1.5–2 billion dollars—and a lack of a robust component base. This suggests automakers may favor localization of Chinese models or adapting an existing Chinese platform.
AvtoVAZ’s plans to produce C- and D-segment cars in St. Petersburg face delays; the best-case scenario points to mid-summer start. There are additional challenges with resuming Lada Vesta production as the company works to resolve those issues, Burgazliev notes.
Common units are needed
A few years ago Russia debated the possibility of a single platform for multiple domestic brands. In current conditions, this idea remains relevant yet difficult to implement, according to Avtostat partner Igor Morzharetto. He suggests transitioning to a shared platform or engine could play a critical role. While he doubts a new platform will be created, switching to standardized units, particularly engines, could be feasible given the existing production capacity and underutilized lines of production, Morzharetto told this publication.
Sollers has indicated plans to master diesel engines with volumes of 2–3 liters, potentially enabling their installation on other models. However, such a shift would require a national program and careful planning to succeed, Morzharetto adds.
Low demand for electric vehicles
Morzharetto cautions that Russia’s electric car market may not absorb the volume of vehicles announced by domestic manufacturers. He cites Avtotor, Moskvich, Evolute and others as examples, expressing doubt about mass electric vehicle adoption in Russia. If all factories pursue their stated targets, the country could reach only 15–20 thousand electric vehicles this year, he says. Last year, around 3 thousand electric cars were sold, and reductions in state discounts for electric cars further complicate growth prospects for this market.