AvtoVAZ, the Renault-Nissan controlled parent company of the country’s best selling brand – Lada – has announced that all cars of the automaker will have the prices increased by 9% starting Thursday.

The country’s largest auto producer said the reason of the price hike is the current state of the currency – with the plunging ruble losing more than 40 percent of its value against the dollar in 2014. So far this year the currency has lost another 11% and led to automakers scrambling to make any profit – some have closed down the dealerships entirely and others have suspended some models. Imports were particularly affected, with soaring prices due to the currency headwinds – triggered by the worsening state of the economy. Russia has suffered a massive auto market slowdown as consumers refrained from big-ticket purchases – the economy has fallen because of political woes in Ukraine that led to Western sanctions and the crumbling oil prices further impacted to worsen even further the situation.

Bo Andersson, the CEO of AvtoVAZ, said in a statement “AvtoVAZ is one of the last car manufacturers forced to report an increase in selling prices,” even as the company hoped the economic situation in the country would recover quickly and the automaker waited and kept prices level as they have 81% of all parts sourced locally. Andersson said that even as Lada’s price hike is the highest in recent years the brand will remain competitive with imported cars – its most affordable model, the Lada Granta, being now sold for about 300,000 rubles (3,869 euros).

Via Automotive News Europe


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