The largest car manufacturer in the Russian Federation, AvtoVAZ, has announced plans to implement a four-day work week starting from the end of September 2025. This decision comes amid a sharp decline in sales, an increase in the key interest rate set by the Central Bank of Russia, and intensified competition from Chinese automotive brands.
This is reported by Finway
Reasons for the Deteriorating Situation at AvtoVAZ
According to the company’s own forecasts, domestic sales volumes are expected to decrease by 25% by the end of the current year. In the first half of 2025, AvtoVAZ sold only 155,481 vehicles — significantly lower than in previous years. Experts cite the high key interest rate set by the Central Bank as the main reason for this collapse, which has sharply reduced the availability of auto loans for most Russians.
Additionally, a significant decline in real incomes due to the war and sanctions has further reduced demand for new cars. The situation has also been exacerbated by the aggressive expansion of Chinese manufacturers. Before the onset of the full-scale war, their market share in Russia was less than 10%, but today it has exceeded 50%. Chinese companies have quickly adapted to the demands of the local market, actively lowering prices and pushing out Russian brands.
“AvtoVAZ” – the largest car manufacturer in Russia is preparing to transition to a four-day work week starting from the end of September. Despite grand statements about “successful import substitution,” Lada is struggling to compete, with Chinese cars now accounting for over 50% of the market.
Consequences for Employees and the Industry
At the AvtoVAZ plant in Tolyatti, over 30,000 people are employed. The transition to a reduced work week means lower wages and diminished social protection for them. A similar decision was made in 2022 when the company temporarily reduced working hours due to the mass exit of foreign partners. At that time, sales of flagship Lada models fell by 48.2% — marking one of the most unsuccessful periods in the brand’s history.
Despite the loud statements from Kremlin officials about “import substitution” and ostentatious presentations of new models, the Russian automotive industry is showing deeper degradation, especially without access to Western technologies and credit resources. Government support for the industry is becoming regular and is aimed solely at preventing its complete collapse.