Russian automaker AvtoVAZ could see its vehicle sales and production rates decline by approximately 20–25% during the remaining months of 2026 because of the suspension of subsidized car loan programs. Dmitry Klementyev, deputy head of the Russian Industry and Trade Ministry's automotive and railway engineering department, made the warning on October 22.
He was speaking at a meeting of the Federation Council devoted to government support programs for the automotive market.
Klementyev warned that the suspension of preferential car loans could significantly weaken demand for vehicles made by Russia's largest passenger car manufacturer and force it to slow production.
In late September, the Industry and Trade Ministry announced that the budget funds allocated to support vehicle demand in 2026 had been exhausted ahead of schedule.
The government had allocated 20 billion rubles to subsidized car loans and another 30 billion rubles to preferential leasing programs. Both programs were suspended for the remainder of the year after the funds were used up.
The preferential car loan program allowed certain categories of buyers to purchase Russian-made vehicles at government-subsidized discounts.
The standard discount for cars with internal combustion engines was 20%, rising to 25% for residents of Russia's Far East. Families with two or more children were eligible for a 10% discount, while certain participants in the war against Ukraine who had been wounded could receive discounts of up to 40% on specially adapted vehicles.
AvtoVAZ executives had previously warned about the company's dependence on government support. In early October, company Vice President Dmitry Kostromin said sales of Lada vehicles could decline in the fourth quarter following the suspension of subsidies.
The Industry and Trade Ministry is also considering whether plans for the automotive industry in 2027 need to be revised. The ministry has linked that possibility in part to the level of future budget funding for demand-support measures.
Klementyev's forecast does not mean that vehicle production has already fallen by a quarter. It concerns the risk of lower sales and production rates during the remaining months of 2026 if the current conditions of government support remain unchanged.