Russia has become an important market for Chinese brands including Chery. The Chery Jetour X70 Plus SUV is pictured.
Chinese automakers could benefit in Russia after global brands halted exports to the country and stopped production at their Russian factories amid the Ukraine crisis.
Volkswagen, BMW, Hyundai and Toyota are among automakers that have halted output at their Russian plants after Western governments imposed sanctions on the country following its invasion of Ukraine. Others including Porsche and Bentley have stopped exporting to Russia.
Click here for a roundup of how Russia’s invasion of Ukraine is impacting the auto industry.
Chinese automakers operating in Russia have so far been silent on whether they will continue do business in the country.
Russia has become an important market for Chinese brands including Great Wall's Haval, along with Chery and Geely, mainly for sales of SUVs.
"In the event that U.S. and European Union sanctions on Russia stay for a prolonged period of time and U.S. and European carmakers become effectively prohibited from doing business in Russia, there is potential for Chinese automakers to gain share in the Russia market," Eunice Lee, senior analyst focusing on Asian autos at bankers Bernstein, a bank, said in a report.
Chery is the top-selling Chinese brand in Russia. See chart below.
China has yet to place sanctions on Russia, allowing its businesses to continue operating.
Geely said its Russia business "had basically stopped" in a statement to Automotive News Europe but did not elaborate further on what that meant.
Vehicle exports from China to Russia trebled to 122,800 in 2021 from 42,700 in 2020, Bernstein said.
Great Wall builds vehicles in Russia in a plant in Tula state, close to Moscow, while Geely has a factory in Russia-aligned Belarus.
Chery has been in talks with a local plant to assemble cars in Russia, local industry analyst company Autostat reported last year.
Last year, 18 percent of the 1.67 million light vehicle sales in Russia were imported, with the remainder built locally, Autostat said.
Renault-owned AvtoVAZ leads the market with its locally produced Lada brand that had a 24 percent market share in February, AEB figures show. Kia was second with a share of 13.8 percent.
Renault has not publicly discussed its strategy in Russia, its second biggest market globally, but its options are not good as production collapses.
Jefferies, a bank, predicted vehicle production output in the country will fall by 70 percent in 2022.
"It would be perfectly legitimate for Renault to consider an exit from AvtoVAZ," Jefferies analyst Philippe Houchois told Bloomberg. "Renault could take the loss, but an exit would be a tough decision."
