Chinese car sales in Russia shift into high gear following Ukraine invasion
Two years ago, Chinese models accounted for less than 10 per cent of all new car sales in Russia. By the end of 2023, that figure was over 40 per cent.
Workers walk past new Chinese cars unloaded from a ship at a commercial port in Vladivostok, Russia August 25, 2023. REUTERS/Tatiana Meel/File Photo
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MOSCOW: The ongoing assault on Ukraine has changed almost every aspect of life in Russia, including people's choice of car.
Some Western and Asian automotive brands withdrew from the Russian market after the invasion of Ukraine about two years ago.
Companies from Germany, the United States, South Korea and Japan ended their sales, supply, service operations, or sold their assets in Russia.
But Chinese car firms such as Geely, Chery and Changan have since moved to fill the gap, with the market now offering more than 100 Chinese models.
With little choice, Russian consumers’ attitudes towards Chinese cars have changed.“When there were Japanese, German or Chinese cars, consumers used to choose other brands, not Chinese cars. Now, consumers are really going through, looking, and choosing from China what to take,” said director of analyst firm Avtostat Sergey Tselikov.
BIGGER MARKET SHARE
Two years ago, Chinese models accounted for less than 10 per cent of all new car sales in Russia.
By the end of 2023, that figure was over 40 per cent.
In line with the increase, the share of dealerships selling Chinese cars in Russia more than doubled from 31 to 65 per cent in 2023.
Many of the factories formerly used by Western car manufacturers are now being used by their Chinese counterparts.
Russia has jumped from 11th place to become China's largest export market for cars, reaching a value of US$9.4 billion between January and October last year, Chinese customs data showed.
The figure was almost 10 times the US$1.1 billion worth of car exports to Russia during the same period in 2022.
Russian car brands have also become more reliant on Chinese components.
“Those cars that we used to call historically Russian are often Chinese cars on which we stick new labels, or they are cars with a very large component composition from China,” said Mr Andrei Olkhovsky, CEO of luxury car dealer Avtodom.
CHINESE CARS COULD GET CHEAPER
Although domestic car production is yet to gain momentum, Russian brands appear to have an advantage.
In an industry that is seeing price hikes around the world, they are among the few that have kept their price growth closer to the overall inflation rate.
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Still, owning a car has become a luxury for many people.
The idea that Chinese cars are cheap has been proven wrong, with the average Chinese car sold in Russia at twice the price in China.
That trend, however, could see a reversal this year, said observers.
Currently, large dealerships are fully stocked with Chinese cars.
Experts forecast that the healthy supply will lead to slower price growth and significant discounts on the Chinese models, making these cars even more attractive than they are.
