- 3 Chinese auto brands grab 16% of shrinking market as global carmakers exit
According to Nikkei Asia article published on February 28, 2023, western sanctions imposed on Russia during the Ukraine war have created an opening for Chinese-made autos and electronics to expand their market share in the country.
The Chinese groups Chery Automobile, Great Wall Motor and Geely Automobile captured a combined 16.5% of sales of new passenger cars and small commercial vehicles in Russia for 2022, up from 6.3% the year before, the Association of European Businesses reports.
Chery increased Russian sales by 31% to 53,000 autos, though Geely's volume slipped by 0.7% to 24,000 vehicles.
Chinese brands' market share is on track to surpass one-quarter this year, Russian media report, as the automakers benefit from the ease of maintaining parts supplies from China.
Like India and many other countries, China has not joined the Western-led sanctions against Russia. Russian-Chinese relations "are progressing and growing steadily, and we are reaching new milestones," President Vladimir Putin said at a meeting with top Chinese diplomat Wang Yi in Moscow last week.
Trade between the two countries jumped 30% last year, China's General Administration of Customs reports, reaching a second consecutive annual record.
Since Moscow invaded Ukraine a year ago, most foreign automakers have halted production in Russia. Mercedes-Benz Group and Toyota Motor are among the companies that have said they will exit the Russian market.
Overall, new-auto sales in Russia plunged by 59% last year to roughly 690,000 autos. Sales of foreign makes fell by about 80%, benefiting Chinese and Russian brands.
The share for top Russian automaker AvtoVAZ climbed by 6 points to 27.4%, but the Lada maker's sales volume tumbled 46% owing to parts shortages and factory stoppages.
The Russian auto market's Chinese shift goes deeper than sales.
When France's Renault exited a Moscow plant last year, the revived Soviet-era brand Moskvich took over the factory and started production in November. The car's design is based on autos made by China's Anhui Jianghuai Automobile Group, a midtier state-owned company known as JAC, and many of the components are said to be made in China.
AvtoVAZ is reportedly considering working with a Chinese automaker at a St. Petersburg assembly plant abandoned by Nissan Motor. Such a venture would produce up to 10,000 luxury vehicles a year.
This pattern of market share replacement also has been seen in consumer electronics.
Led by Xiaomi, Chinese-made smartphones held 80% of the Russian market last year, up from 45% in 2021, according to estimates by a Russian private-sector firm.
Before the war against Ukraine, the iPhone was the phone of choice among Russians who could afford them. Though Apple officially exited Russia in response to the invasion, Russians can still get their hands on iPhones through backdoor imports. But their higher prices appear to have eroded the brand's market share.
China's Huawei Technologies became Russia's second-largest seller of notebook computers last year by market share, up from eighth place in 2021. HP dropped from the No. 1 seller to fourth place in 2022.
