The automobile industry is one of the main sectors of the Russian economy, leading in terms of its turnover all of the other mechanical engineering sectors. However, the direct contribution of the automobile industry to the Russian GDP is not very large —approximately 1%. Nevertheless, the industry employs more than 150 thousand people. Furthermore, the automobile industry creates up to 4.5 to 5 million jobs in the chemical, metallurgical and electronic industries, the production of automobile components, and a number of other sectors of the economy, the well-being of which is directly connected to the functioning of the automobile industry.
In 2012, the Russian Federation produced 1.85 million passenger cars, 562.1 thousand of which (-9% compared to the 2011 results) are Russian-brand cars and 1,287.9 thousand (+22% compared to the 2011 results) are cars of foreign brands. Also, there were 380,000 cars of other types produced, including trucks and specialty vehicles. In 2012, the overall automobile market comprised 2,759 thousand passenger cars, which makes it the sixth in the world in terms of sales.
The first car in Russia was produced jointly by the factories of Frese and Yakovlev in 1896. However, before the Revolution there was practically no automobile industry in the Russian Empire, and it was represented only by the Russo-Baltic Wagon Factory in Riga, which produced 451 cars.
The first full-fledged car plant in Russia was Moscow AMO (now AMO ZIL), which had been producing small lots of trucks since 1924. In 1931, AMO was completely rebuilt for mass car production, and in 1932, another plant, GAZ in Gorky (Nizhny Novgorod), started its work. The plant produced both passenger cars and trucks under a license from the Ford Company. The Moscow Compact Car Factory (later AZLK) functioned from 1947, producing a Soviet copy of the OpelKadett with equipment received from Germany. In the following decades, numerous automobile factories were built in other areas (for example, the Zaporozhye Automobile Building Plant, producing the smallest and cheapest Soviet cars, or the truck-producing Urals Automobile Plant). However, the greater portion of production was still produced at the three plants indicated above.
Everything changed in 1970, when a giant automobile plant in Tolyatti (now AvtoVAZ) started its work, and again in 1979 when a similar, giant truck plant in Naberezhnye Chelny (KamAZ) began operations. The plant in Tolyatti was built and equipped by Fiat, producing Fiat 124 cars that soon became the most popular in the country. This vehicle went through many modifications (production of the last ceased only in 2012). Soon, the plant started to use its own designs, the best of which was the light off-roader, the Niva, one of the first off-roaders with a unitized body in the world. The Kama Automobile Plant was producing heavy trucks from an original design, and had no competitors in the Russian market until the 1990s.
The transition to a market economy was hard for the Soviet automobile giants, except for VAZ. AZLK (Moskvich) was closed, ZIL cut its production to a minimum, and GAZ stopped producing passenger cars. However, throughout the recent decade, the situation has significantly improved due to the common growth of the Russian economy and its partnership with international autoconcerns.