Auto sanctions on Russia gives China big opening for auto sales

• Chinese car brands account for almost one-third of Russia’s car market, highlighting China’s growing importance to the Russian economy after the exodus of Western companies
• New sales of passenger cars and light commercial vehicles (LVC) in Russia were down some 61 percent year-on-year
• However, data from Russian analytical agency Autostat showed that sales of Chinese branded passenger cars, including Haval, Chery and Geely, have surged, rising to 16,138 units in November

BEIJING, China: Chinese car brands account for almost one-third of Russia’s car market, highlighting China’s growing importance to the Russian economy after the exodus of Western companies, according to Reuters.

After Western sanctions cut Russia’s access to auto manufacturing materials, and amidst falling demand and high prices, new sales of passenger cars and light commercial vehicles (LVC) in Russia were down some 61 percent year-on-year.

However, data from Russian analytical agency Autostat showed that sales of Chinese branded passenger cars, including Haval, Chery and Geely, have surged, rising to 16,138 units in November and almost double the figure of 8,235 in January, while market share rose to 31.3 percent from 9.6 percent.

“There is little production of Western car brands and few imports, so the market is divided between the Russian and Chinese car industries,” said Russian automotive analyst Vladimir Bespalov, as quoted by Reuters.

While demand for cars in Russia remains at a lower price range of up to $23,961, Chinese are also taking over the Western niche of higher priced vehicles.

After competing with domestic automakers for market share since they began building factories in Russia in the early 2000s, western carmakers ceased their operations after Moscow began its invasion of Ukraine in February.

China’s JAC, trading in Russia under a local Soviet-era car brand, “Moskvich,” is assembling cars at a plant taken over from French carmaker Renault, while Nissan, Mercedes and Ford are among the others that have left Russia.

Bespalov said that if the situation remains unchanged, Chinese producers could account for around 35 percent of sales in Russia next year.

According to China’s Association of Automobile Manufacturers, for the first 10 months of the year Russia was the sixth-largest export destination for Chinese automotive products, which includes vehicles and parts, accounting for 3.9 percent of sales, virtually unchanged from the same period in 2021.