Chinese concerns have reached the peak – Kommersant FM

Sales of Chinese cars in Russia have reached their peak. Reuters came to this conclusion after reviewing data from Autostat and the consulting company PPK. By the end of summer, the share of sales of brands from China reached 56%, but then stabilized at around 53%. This is about 60 thousand cars per month. Can we say that Chinese expansion in the Russian market has stopped? Daniil Babkin talks about this.

After almost two years of shocks from sanctions and the departure of brands, the Russian car market has stabilized, writes Reuters. Although consumption is still far from previous levels, Russians used to need at least 1.5 million new cars a year.

But until February 2022, the share of Chinese brands did not exceed 10%. And in August 2023, it reached a maximum of 56%. Since then it has not increased, and Reuters concludes that sales have peaked. However, with the strangulation of parallel imports of Chinese cars, there may be even more, says Maxim Kadakov, editor-in-chief of the Za Rulem magazine:

“What have Chinese manufacturers done so far? They simply occupied the abandoned territories. They were friendly and united, but gradually, probably closer to spring, they will begin to compete with each other in Russia. There is pressure on parallel imports, this is also part of this fight. If this gap is closed, who will take place in the market? Of course, Chinese manufacturers.”

Another 40% of the market is now controlled by AvtoVAZ, according to the manufacturer’s own estimates. It recently reported 10-year-high sales in October. But the Russian company’s products are from a different segment, so it cannot be called a competitor to Chinese brands, says Sergei Klimov, co-founder of the Dolavto company:

“A Russian car is a different class. In fact, the Chinese don’t have much of a car there. And in the coming years, I don’t imagine that the trends will somehow change. In the Russian segment, an explosion in production is not expected, if you read AvtoVAZ’s plans. If you get into 1.5-2 million rubles, then this, of course, will be a very large segment in terms of demand volume.”

For example, Iranian manufacturers are targeting this segment. But Kommersant FM’s interlocutors assess their prospects with skepticism. Meanwhile, the market is talking about a shortage of spare parts for Chinese cars. They increased sales so quickly that they did not have time to deliver parts in the required volume. This problem will be solved over time, but what will happen to the secondary market is far from obvious, says Jan Heitzeer, vice-president of the National Automobile Union:

“Today, one-year-old and one-and-a-half-year-old Chinese cars have appeared on the market. And it is still not clear what they will be in operation. Some of them have traveled only 20-30 thousand km. Probably, taxis and carsharing cars will appear in the near future; there will be awareness and understanding of what they are. The export market is developing quite actively. Numerous service functions simply cannot keep up with it.”

The Chinese ambassador to Russia said that the country is ready to constantly develop models that meet market needs. Indeed, the range of brands continues to expand. But the editor-in-chief of the Za Rulem magazine, Maxim Kadakov, is wary of this:

“Speaking of foreign manufacturers, we actually put all our eggs in one basket. The Chinese are still putting pressure on us economically with the prices of the cars we sell. At the same time, automakers from China, despite all the calls to come to our market and organize their production here, are not trying to do this.”

While Haval is making serious investments in local production, the company has a plant in the Tula region. Chery promised to launch the assembly by the end of the year.

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