Russia has become the largest foreign market for the Chinese auto industry

China exported approximately 287,000 vehicles to Russia from January to May 2023, according to data from the General Administration of Customs (GCU) of the PRC, compiled by the China Association of Automobile Manufacturers, China’s Phoenix portal reported. For the whole of 2023, China delivered about 162,000 vehicles to Russia.

In monetary terms, according to the GTU, the import of Chinese cars to Russia in January-May 2023 increased five times compared to the same period last year – up to $3.57 billion against $685 million. In total, from January to May 2023 China exported 1.933 million cars, which is 79.8% more than in the same period of time in 2022. In second place after Russia in the list of importers of Chinese cars is Mexico (159,000 units), then Belgium (120,000 – through it import cars to Western Europe), Australia (101,000) and Great Britain (90,000).

On June 20, the acting head of the Federal Customs Service (FCS) of Russia, Ruslan Davydov, said in an interview with RIA Novosti that the import of cars from China to Russia tripled in January-May compared to the same period in 2022. In his opinion, with the departure from In Russia, the Europeans gave the Chinese “a gigantic chance to develop their auto industry.”

Cars delivered to Russia are cheaper than those going to the European market: on average, the price of one such car is $12,433, while in Belgium – $27,180, and in the UK – $29,453. This is partly due to the fact that Belgium and the UK are among leaders in the import of Chinese electric vehicles, which are more expensive. At the same time, even cheaper cars are shipped from China to Mexico: the price of one such car is $8,594 there.

According to the Association of European Businesses (counts sales through official distributors), in Russia in the first half of 2023, three Chinese auto brands – Chery Automobile, Zhejiang Geely Holding Group and Great Wall Motor – accounted for a third of all sales of new passenger cars. According to Avtostat, which considers car registrations and therefore takes into account the import of cars not only through distributors), the “big three” Chinese brands in popularity immediately follow the leader of the domestic market, AvtoVAZ. Chery’s sales for the first half of the year grew, according to Avtostat statistics, by 3.7 times to 47,176 cars, Haval – by 3 times to 38,551 cars, Geely – by almost 4 times to 32,681 units. Sales of new Ladas, for comparison, increased by 84% in the first half of 2023 to 134,551 cars.

The Russian market is very important for China, since, in fact, this is the first example of a large-scale expansion of Chinese automakers outside their country, says Sergey Lukonin, head of the Chinese economics and politics sector at the Center for Asia-Pacific Studies at IMEMO RAS. Chinese luxury brands have not yet entered the Russian market, although they announced this, he adds. According to Lukonin, the departure of Japanese and Korean manufacturers largely contributes to the success of the Chinese in the Russian market. Despite the distrust of Chinese cars that some Russians still have, in fact they have already approached European brands in quality, the expert concludes.

All major Chinese car companies, with a few exceptions, continue to operate in Russia, says Sergey Burgazliev, an independent automotive industry consultant. According to him, with the current trend, more than 500,000 cars from China could come to Russia this year, which can be considered a very significant indicator. In Chinese statistics, already finished cars appear, not car kits, the expert adds. These figures will continue to grow, adds Burgazliev, since there are practically no alternatives to Chinese cars in Russia now, with the exception of certain Korean models: cars from Europe and Japan are not officially delivered to us. And with an increase in the salvage fee from August 1 (charged on all manufactured or imported cars; see Vedomosti on July 7 and 10 for its indexation), most likely, prices for Chinese cars will increase, but the growth trend in their sales will still continue, he believes expert.