By Kontur | 2025-08-13

Factory floors in Russia's industrial heartland are going quiet a day earlier than before.

At KamAZ's truck plant in Naberezhnye Chelny, the clang of presses and the steady churn of conveyor belts now give way to quiet on Fridays. Management calls it a necessary step. Workers know it means their paychecks will shrink.

"The lack of market growth prospects and the pressure from unsold inventory held by importers compel us to act responsibly and take unpopular but necessary measures to reduce production and announce the introduction of a workweek shortened by one day starting August 1," the company announced on July 25.

The statement warned that the domestic heavy-truck market had collapsed by almost 60% in the first half of 2025. It blamed "the short-sighted policy of importers of foreign equipment" and "the central bank's monetary policy" for cutting off credit and leasing, forcing customers to return thousands of trucks.

More than 30,000 vehicles, KamAZ admitted, are gathering dust in storage yards.

Cutbacks spread nationwide

KamAZ is hardly alone. In Nizhny Novgorod, the Gorky Automobile Plant -- GAZ -- has also moved to a four-day week this month. Sales of medium-duty trucks are down nearly 40%, light commercial vehicles by 30% and buses by 60%.

"The introduction of a reduced working week in these conditions allows the plant to preserve jobs, adapt the production program to market conditions, and organize a uniform workload," the company told Interfax in July.

The cutbacks are spreading quickly. AvtoVAZ, Russia's largest carmaker and the producer of the Lada sedans, will decide in September whether to follow suit, RIA Novosti reported in July.

Management blames the high key rate and tightening of requirements for borrowers on car loans, as well as the massive import of foreign cars -- with foreign brands "pursuing a policy of price dumping."

In Ulyanovsk, the UAZ plant has already reduced hours. With production down, entire workshops have been idled, leaving some workers earning about 20,000 RUB ($250) a month.

The company has faced rare public discontent. In May, several dozen workers stopped work over pay, prompting a review by regional prosecutors. Management denied a strike occurred and said the average salary exceeds 41,000 RUB ($515).

The Likinsky Bus Plant (LIAZ) and the Pavlovo Bus Plant have also switched to four-day schedules, while in Saint Petersburg, the former Nissan plant has extended its summer shutdown.

Credit crunch

Russian economists admit the problems are not limited by seasonal slumps.

Dmitry Evdokimov, a research fellow at the Presidential Academy's Center for Spatial Analysis and Regional Diagnostics, told the state-run Rossiyskaya Gazeta in July that demand for passenger and freight vehicles in 2024–2025 has fallen. He cited high interest rates on car loans and leasing, along with a slowdown in investment.

In the truck sector, he said, the situation is additionally affected by fleet saturation and reduced demand from small and medium-sized businesses and regional contractors.

Anatoly Kolesnikov, associate professor at the Plekhanov Russian University of Economics, pointed to the same credit crunch.

There has been a mass return of leased equipment -- more than ten thousand units, he said, noting that warehouses now hold an oversupply of imported trucks brought in during 2024 -- more than 30,000 trucks.

Imports issues

China has played a role, too. Last fall, AvtoVAZ chief Maxim Sokolov accused Chinese rivals of incomparable discounting to lure customers away from Lada sedans ahead of changes to car recycling fees.

According to a July report by Autostat, foreign truck imports, mainly from China, dropped nearly 90 percent in early 2025 compared to the previous year. Yet the domestic market remains clogged with unsold inventory.

Olga Astafieva, associate professor at the Financial University under the Government of the Russian Federation, argued in the interview with Rossiyskaya Gazeta that the four-day schedule was "an anti-crisis measure that will help avoid layoffs, pay wages, preserve social guarantees, while reducing production costs."

But Kolesnikov cautioned that it is only a temporary fix -- one that may help companies weather the downturn but will not address key problems: dependence on imports, high interest rates and weak domestic demand.

In Saint Petersburg, where dealerships are watching cars pile up, auto club chairman Denis Shubin put it plainly.

"The stockpiles are not decreasing as they should... If somehow demand for cars is unleashed, or the key rate drops significantly, or bank lending policy changes, then the situation could improve. But so far there is nothing good on the horizon -- neither for auto retail nor for auto production," he told RBC in August.