The Russian economy has been dealt another hammer blow as car dealerships close amid dwindling sales. Roughly 200 dealerships have closed since the start of the year, representing 5% of those across the country. Alexey Podschekoldin, head of the Russian Automobile Dealers Association, told Autonews that another 30% of dealerships face financial pressures and are at risk of closing.

He added that the current economic climate means that the automobile market is not profitable for manufacturers or dealerships. The average car brand in Russia sells just 12,900 per year, a whopping 28 times less than the US, despite having nearly three times as many brands in the country.

While Western car manufacturers increasingly move their operations out of Russia, the country has still seen an increase in the number of brands.

In 2022, there were just 60 car brands registered, which then skyrocketed to 124 by 2025 thanks to an influx from the Chinese market.

Despite this, the number of cars sold in the first six months of the year has decreased by 28% compared with this time last year, according to Dmitry Yeregin, deputy head of the Avtostat analytical centre.

Vehicle prices are unaffordable for many Russians, and the Central Bank has imposed stricter loan policies and increased interest rates - all contributing to the decline in sales.

The Automobile Manufacturers Committee of the Association of European Businesses and Avtostat estimated that 1.25 million passenger cars will be sold in Russia by the end of the year.

This baseline figure represents a 20% decline compared to 2024, while the worst-case scenario would be a 30% drop.

While China remains a key ally of Russia and has helped maintain its automobile industry, trade between the two is actually tanking.

Figures issued on Monday showed trade totalled £79.3billion - a drop of 9.1% year on year. Exports from China to Russia fell 8.4% over the first two quarters of 2025 while imports into China from Russia reduced by 9.6%.