The Russia-Ukraine war has led to several sanctions and closures of car companies in Western countries. New automobile production in Russia plummeted in the first half of 2023. The production in the same period this year went up by more than 60%, reaching 330,000 units; however, the figure was still below 50% of it was before Russia’s invasion of Ukraine. Besides, the production recovery was lower than the domestic automotive sales growth.

The current demand was supported by the 70%-85% higher car scrapping fees, announced by the Russian government in early July, and the rising central bank interest rates, raised to 18% in late July.