The Russian automaker AvtoVAZ is heading into one of its darkest years, marked by a severe collapse in sales and loss of market positions. The data for 2025 are merciless: sales of new Lada cars have plunged by nearly 25%, reaching a modest 329 thousand units. While the entire Russian market is shrinking by about 15.6%, the legendary brand from Togliatti is demonstrating far weaker results than average, proving that even massive state lobbying cannot stop the free fall.
The concern's great hope - the sharp increase in the so-called “utilization fee“ (ecological recycling fee) - turned out to be a double-edged sword. The authorities have raised rates four times in the last year and a half in an attempt to stifle imports and protect local production. If in 2024 the fee for a mass-produced foreign car was about 300 thousand rubles, then from the beginning of 2026 it has already reached a colossal 900 thousand. However, the result is not a revival of Lada, but rather a “takeover from within“.
The real winners of the situation turned out to be Chinese companies, which cleverly disguised themselves behind new Russian brands. While AvtoVAZ shortened its working week and reduced production plans from 500 to 300 thousand cars, brands such as Belgee and Tenet literally blew up the statistics. The first is the result of cooperation with Geely and doubled its sales, and the second - Tenet - began assembling localized Chery models at the former Volkswagen plant near Kaluga. These “new” players are offering more technology and modern design at competitive prices, leaving AvtoVAZ's outdated models in the role of catch-up.
To survive this “perfect storm“ of high loan interest rates and aggressive eastern competition, AvtoVAZ is trying to make another U-turn. After months of four-day work, the Togliatti plant is returning to full-time operation from the beginning of 2026 with the ambitious goal of producing 400,000 vehicles. The question remains, however: will the market be willing to buy them, or will buyers continue to migrate to more refined Chinese-Russian hybrids?