Chinese Auto Dealers Take Over EU-Exited Russian Market

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Western auto brands increasingly being replaced by Chinese models as China dealerships in Russia increase 20% in 5 months. 

Chinese car dealerships have been opening in Russia at a record pace, according to Russia auto industry analyst Otkrytiye Auto. Since the beginning of 2022, Chinese car dealerships in Russia have increased by nearly 300 new outlets to 936.

“Russian auto retailers have never seen such a rapid growth in the number of car dealers from China, which happened just this Autumn,” Otkrytiye Auto experts said, noting that 185 showrooms had opened from July to November.

The leading brand among the new dealerships was Exeed with 48. A total of 47 new franchises of the new Omoda brand also opened, while Chery is now the leading Chinese brand with 167 dealerships in Russia. Geely also increased its number of car dealerships by a third in just 10 months, with 44 new openings, bringing the company’s total number of dealerships in Russia to 133.

The number of FAW (Russian) and Changan (Chinese) dealerships has also increased.

“Among other China brands that did not make it into the top 10, we should mention, are new brands Voyah and Skywell, which have already opened three new stores this fall, as well as GAC, with one new sales outlet,” the report said.

The popularity of Chinese automobiles in Russia has been rising amid the exodus of European, American, and Japanese brands. Many automakers found it difficult to continue operations in the country due to political pressure and logistical disruptions resulting from Western sanctions, after deliveries of cars and spare parts to Russia were stopped. The EU market exit from Russia has particularly affected EU brands such as Renault, who stated in May they would lose about €2.2 billion from exiting the Russia market. Other impacted European auto manufacturers include Skoda, VW, BMW, Mercedes, and Audi. The Russian auto industry had been seen as a growth market, shifting some 1,666,780 units during 2021. It has been presented, on a plate, to China.

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Russia Briefing is written and produced by Dezan Shira & Associates. During these uncertain times and sanctions imposition, our firm assists Russian companies relocate to Asia, and provides financial and sanctions compliance services to foreign companies operating in Russia. We also provide market research and advisory services to foreign exporters interested in Russia as the economy looks to replace Western sourced products. Please contact us at russia@dezshira.com or visit us at www.dezshira.com.