Chinese Auto Brands Gaining Russian Market Acceptance

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Chinese automobiles will have doubled their presence on the Russian market from 3% to 6% by the 2021 year end, local car dealers have forecast. Chinese automotive products are strengthening their positions in Russia, while European and American auto sales are slowing.

Denis Migsl, Director of the Fresh Auto Network in Moscow said that “Chinese brands are growing better than anyone in comparison with last year above all because of their accessibility.”

The best dynamics are being demonstrated by Chery, according to Igor Morzharetto, an auto expert and a partner at the Avtostat analytical agency. He says that the three-fold growth in the sales of this brand has been observed for several months. By the end of August 2021, the company had taken eighth place among all brands for the first time. Other Chinese brands, such as Haval and Geely, are also gaining popularity in Russia. Geely bought Volvo a few years ago, with the ex-Swedish brand still highly sought-after in Russia.

While Chinese cars are a long way off from conquering the Russian market, they have significantly bolstered their positions. Consumers have given high marks to their finishing levels, while the Chinese auto industry is not impacted by the problems with semi-conductor supplies. China has prioritized the distribution of semi-conductor supplies towards its domestic auto industry.

However, delays in the deliveries of chips are still impacting the automotive market with some models still scarce. According to Vladimir Miroshnikov of Rolf, the best dynamics have been demonstrated by Audi, BMW, Mercedes-Benz, as well as by KIA, Toyota, Volkswagen, and Ford, while the sales of Genesis, Jaguar, Mitsubishi and Nissan have decreased. The sales dynamics are determined by the accessibility of automobiles.

Marketing Director at Avilon motor group Andrei Kamensky pointed out that the sales of luxury cars have been affected the most by the shortages of microchips and semi-conductors. The lack of automobiles impacts price growth. Over the year, new European and American vehicles rose on average 20% in price, which resulted in Chinese cars becoming more competitive.

China’s upcoming EV industry also has its eyes on Russia’s auto industry which it sees very much as a growth market.

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Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at russia@dezshira.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

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