Automotive production is a significant industry in Russia, directly employing around 600,000 people or 1% of the country's total workforce.

[5] The turn of the nineteenth and twentieth centuries was marked by the invention of the earliest Russian electro car, nicknamed the "Cuckoo", which was created by the engineer Hippolyte V. Romanov in 1899.

[14] In 1929, due to a rapidly growing demand for automobiles and in cooperation with its trade partner, the Ford Motor Company, the Supreme Soviet of the National Economy established GAZ.

[15][16] A year later, a second automobile plant was founded in Moscow, which would become a major Soviet car maker after World War II and earn nationwide fame under the name Moskvitch.

By the early 1980s, Soviet automobile industry consisted of several main plants, which produced vehicles for various market segments.

[26] Some of them, like AvtoVAZ, turned to cooperation with other companies (such as GM-AvtoVAZ) in order to obtain substantial capital investment and overcome the crisis.

Lada's declining sales during the 1990s, and toughening European Union emissions requirements, saw exports to Western Europe discontinued by the end of the decade.

It was estimated in 1996 that a newly bought AvtoVAZ car needed $1–2,000 worth of repairs to bring it to a comfortable level of safety.

Russian metal companies, having achieved significant profits on foreign markets, sought to invest in Russia's automotive sector.

[33] Siberian Aluminum initially bought Pavlovo Bus Factory and accumulated increasing ownership stakes in GAZ.

[34] In 2003 Russian manufacturers still accounted for over 90% of car production in Russia, either under their own brand or in partnership with a foreign company.

[36] Macroeconomic trends were strong and growing incomes of the population led to a surging demand, and by 2005 the Russian car market was booming.

[38] Foreign companies started flocking to enter Russia in the 2000s, seeing it as a local production location and export powerhouse.

In late 2005, the Russian leadership enacted legislation to create special economic zones (SEZ) with the aim of encouraging investments by foreign automotive companies.

[41] In late 2008, the Russian government introduced protectionist measures, worth $5 billion, to improve the situation in the industry.

[45] Sales of Russia's largest carmaker Avtovaz doubled in the second quarter of 2010 as a result, and the company returned to profit.

[52] The 2014 economic crisis led to a new fall in car sales and production levels, and reduced forecasts for future growth.

[57][58][59][60] Following this, the Russian government temporarily reduced requirements for airbags, seatbelt pretensioners, anti-lock braking systems and emissions standards.

[62] In June 2023, the production of domestically produced anti-lock braking and electronic stability control systems began at the Pegas Electromechanical Plant in Kostroma.

Subsequently, the earlier declared simplified rules for the production of vehicles in Russia remain in place until February 2024, albeit with a phased return of requirements.

[41] Cars with diesel engines are not popular in Russia, accounting for just 7.6% of all sales as of 2015, compared to half of the market in much of Western Europe.

[69] In the light commercial vehicle sector, the GAZelle van, manufactured by GAZ has been very popular, occupying a market share of 49% in 2009 and selling 42,400 units.

Avtotor performs SKD, CKD or full-cycle assembly of foreign models, such as BMW, Kia, and General Motors' Cadillac and Chevrolet vehicles.

[45] In 2016, Hyundai Solaris became the first foreign-branded car to be the best-selling vehicle in the country since sales statistics began in 1970 ending 45 years of Lada domination.

[72] In 2019 Chinese automaker Great Wall Motors started production of Haval F7 vehicles at a plant in the Tula region of central Russia with a manufacturing capacity of 80,000 cars a year.

Another short-lived project was the Yo-mobile, a city car that could burn both gasoline and natural gas and was connected to a pair of electric motors.

The car was introduced on 13 December 2010 in Moscow, a product of a joint venture between Yarovit, a producer of trucks based in St. Petersburg, Russia and the Onexim investment group, headed by Mikhail Prokhorov, who was the leader and financier of the project.

[49] It is politically a very important part of the country's economy: firstly, due to the large number of employed people and secondly, because many citizens depend on the social services provided by automotive companies.

For example, the well-being of the giant AvtoVAZ factory in Tolyatti is massively important to the city or to the region of Samara Oblast.

In a symbolic gesture of support, Putin made a highly publicized road trip on the new Amur Highway in August 2010, driving 2,165 kilometers in a Lada Kalina Sport.