A sharp decline in car sales in Russia and the Kremlin's tightening tariff policy have created serious challenges for Chinese car manufacturers, who, after 2022, made the Russian market one of the key ones for expansion. Now, companies are forced to seek new opportunities abroad amid global price wars. This is reported by Bloomberg, writes UNN.
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After most Western brands left Russia, Chinese companies filled the vacuum, gaining significant profits. However, at the end of 2024, Moscow increased the so-called "recycling fee" for imported cars, which added over $8,000 to the cost of passenger cars with small engines. At the same time, high lending rates limited the purchasing power of the population, causing car sales to fall by 27% in the first half of the year. Car imports from China decreased even more significantly – by 62%.
This trend is already affecting the three most popular Chinese brands in Russia, which have lost some of their positions. Demand from the Russian market previously helped China become the world's largest car exporter in 2023, with almost 20% of all overseas deliveries going there. Now, manufacturers are trying to compensate for losses by focusing on other directions.
The overall share of Chinese brands in the Russian market has approached the upper limit of 50–60%, and future growth may be limited by local policies and market capacity
However, the new strategy faces barriers: the EU has imposed up to 35% tariffs on Chinese electric vehicles, the US and Canada – 100%, and Mexico, which has already surpassed Russia in terms of Chinese car imports, is considering its own restrictions. This is due to both competition and political pressure from Washington.
In China itself, manufacturers are also struggling with overcapacity and price wars, which forces them to actively seek export markets. For example, BYD, which has no official presence in Russia, more than doubled its overseas sales and began competing with Chery for the top spot among exporters.
Experts emphasize that Chinese companies are unable to control economic cycles in key markets. According to Paul Gong from UBS Group AG, the current situation resembles 2015, when the fall of the ruble and the slowdown of the Chinese economy led to financial instability in a number of developing countries.
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