Automaker AvtoVAZ considers increasing prices due to various reasons
In the automotive industry, the ongoing discussions between AvtoVAZ and the Ministry of Industry and Trade about direct subsidies for Lada discounts have been a topic of interest. Maxim Sokolov, President of AvtoVAZ, has stated that the company may adjust vehicle prices due to increased production costs, but any potential price increases might be softened by the availability of government subsidies and preferential loan programs.
At the annual "Digital Industry of Russia" (CIPR-2025) conference, Sokolov also addressed the issue of aggressive dumping by Chinese manufacturers, an ongoing investigation into a "price war" on the auto market in China.
Despite these challenges, AvtoVAZ has managed to maintain prices close to what was announced a year earlier for the new Lada Iskra sedan, with prices starting from about 1.25 million rubles in the basic configuration. This is partly due to discounts of up to 20% on the Lada Iskra through government-subsidized lending programs targeted at certain buyer categories, such as large families, education and medical workers, and participants in special military operations.
The "Family Car" subprogram offers an additional 10% discount on the vehicle's cost, and the basic program offers a 20% discount. The expansion of the program to families with two children was made on May 26, following the Ministry of Industry and Trade's previous expansion of the program of preferential auto loans to families with three or more children.
Two-thirds of Ladas are purchased on credit, with the figure even higher for some models, according to Sergei Gromak, Vice President of AvtoVAZ. One option for maintaining affordable prices, as suggested by Gromak, is direct subsidies to automakers, which would allow them to offer discounts to buyers.
However, Sokolov emphasized that selling cars below cost does not allow companies to accumulate resources for development. Inflation is a factor in the increase in production costs, which could lead to price indexing and adjustment. The final decision regarding price adjustments will depend on the market situation, according to Sokolov.
In conclusion, AvtoVAZ's strategy of leveraging government subsidies and preferential loan programs to support demand while aiming to keep prices stable could be a successful approach in maintaining affordability for buyers and reducing pressure on the company to raise prices further. The ongoing discussions between AvtoVAZ and the Ministry of Industry and Trade about direct subsidies for Lada discounts will be closely watched as the market continues to evolve.
The strategy of leveraging government subsidies and preferential loan programs, as employed by AvtoVAZ, could be instrumental in keeping prices affordable for buyers and alleviating pressure on the company to increase prices. The ongoing discussions between AvtoVAZ and the Ministry of Industry and Trade concerning direct subsidies for Lada discounts will remain a substantial aspect of interest within the finance and business spheres as the market persists in its development.
