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Chinese manufacturers intend to assemble vehicles in Russia to localize production
Prolonged Western sanctions against Russia are boosting sales of Chinese-made light vehicles and the surge could continue as long as the “tariffs” remain in place, a Chinese Automobile Association official said Monday. Imported Chinese vehicles now account for more than 49% of the Russian market compared to a pre-conflict share in Ukraine of just 7% according to data from analytics firm Autostat.
Chinese automakers are now also taking control of factories vacated by Western manufacturers. “Chinese manufacturers intend to assemble vehicles in Russia and localize production,” explained Xu Haidong, deputy head of the Chinese Association of Automobile Manufacturers. «There is still huge demand in the Russian market, but this will not necessarily be exclusively dependent on imports. Chinese auto exports to Russia will still be in high demand in the next 2-3 years, after which the Chinese auto sector will likely increase localization in the local market.”
Russia was the top destination for Chinese car exports in the first seven months of this year, with 464,000 cars sold. Mexico ranked second with 224,000 Chinese imports. In 2022, Mexico was the main importer of Chinese cars with 254,000 units, while Russia was the fifth importer with 162,000 units.
It should be underlined that the car market in Russia is growing thanks to Chinese brands. In fact, according to data released by the Automobile Manufacturers Committee AEB, based on data from car manufacturers and official importers, sales of new vehicles in Russia in August grew by 42.3% (+17,634 units) compared to the same month of 2022 and reached 59,332 units. The performance is mainly due to the increasingly massive presence of Chinese brands on the market following the withdrawal of Western brands from the country.
In the first eight months of the year, the market decreased by 4.3% to 392,493 units. At the same time, according to information provided by PPC JSC on sales of new vehicles – based on data relating to their transfer to owners – August was characterized by sales growth of 131.5% (+63,198 units) compared to 2022 and reached 111,272 cars, while in the January-August period the market grew by 29.5% to 610,651 vehicles.