China's car companies defeated Russia and revive their plans to make a comeback

In the first half of 2010, China exported only 1,691 vehicles to Russia, and its export volume decreased by 96.5%. In addition, Chinese car maker Lifan sold only 4065 vehicles in the Russian market in January-August 2010, and China Geely sold 1,138 vehicles in the same period.

The main reason for the decline in sales volume is the conflict between China's auto product structure and Russia's products. There are competitions between the cars of our country and the Lada brand cars produced by Russian local car companies, and other trucks, so the Russian government has taken some measures to restrict it, leading to tariff barriers for Chinese cars to enter Russia.

Russia's auto market is slowly recovering China's auto sales have fallen sharply in Russia, not because of the decline in demand in the Russian market. It is understood that Russia, which is one of the BRIC countries, was once the fastest growing automobile market in Europe. After the financial crisis broke out in 2008, Russian car sales in 2009 fell by 49% to 1.47 million. Industry insiders have predicted that in 2010 Russia’s auto sales will be 1.5 million, which is basically the same as in 2009.

According to the latest data, the sales of cars in Russia from January to October 2010 exceeded 1.5 million, of which sales in October increased 62% year-on-year to 182,000, which was the eighth consecutive monthly increase. At present, the international major statistical agencies estimate the total vehicle sales in Russia for the year 2010 ranging from 180 to 1.9 million vehicles, an increase of 25% to 30%.

The relevant policies of the Russian government The recovery of the Russian automobile market in 2010 was attributed to the “new-for-new” subsidy program that the Russian government started in March. In addition, the Russian government stated that it will spend 13.5 billion rubles (about 430 million U.S. dollars) to continue to implement the “new trade” subsidy program in 2011. However, the Russian government has set up many invisible obstacles to the production and sales of foreign brand cars, and strongly supported the Russian auto manufacturers.

Russian Prime Minister Vladimir Putin has stated that due to the economic recovery and rising demand, the Russian government plans to gradually increase the tariffs on foreign auto imports in order to stimulate international automakers to build factories in Russia and increase domestic auto production. In the coming years, Russia will again raise the import tariffs on cars and trucks on the basis of the original 30%.

Chinese car companies change their tactics to pursue a strategic plan in the Russian market The Russian market was once the largest exporter of Chinese cars. Chery, Great Wall, BYD, Geely, Lifan, Dongfeng and many other OEMs exported cars to Russia. However, the continuous increase of tariffs by the Russian government has brought great impact on China’s auto exports. Due to Russia’s high tariff barriers, Chinese auto manufacturers’ exports to Russia are no longer profitable.

The Chinese auto companies have to open up the Russian automobile market first. Insiders pointed out that the Eastern European market represented by Russia is the next springboard for the European market, and it will have a foothold in Russia and will have very important significance in expanding other markets.

In response, Chinese auto companies have decided to implement local assembly production in Russia:

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