A million Chinese cars a year. Is it good for Russia?
Source：Mashnews
From：Taiwan Trade Center, Moscow
Update Time：2023/12/21
For 2023, the volume of Chinese car production in Russia is estimated at 200 thousand cars. They are distributed approximately equally between the Haval plant in Tula and Avtotor in Kaliningrad, where cars of the BAIC, Kaiyi and SWM brands are produced. If we count Moskvich, which is correct, we will get 250 thousand," Vitaly Mankevich, chairman of the Russian-Asian Union of Industrialists and Entrepreneurs, founder of the Association of Chinese Automakers in Russia, told MASHNEWS.
Mankevich does not undertake to assess how the volume of production of Chinese cars in Russia will change in the future 10-15 years. "Everything will depend on how much Chinese companies will be interested in creating production facilities, whether the program of the Ministry of Industry and Trade on preferential lending and leasing will last. In addition, there is another factor: will the Chinese enter the released capacities left by Western, Japanese and South Korean brands, will they be required to move away from large-node assembly, and if so, in what time frame," says Mankevich.
In addition, it is important that Chinese manufacturers start making "people's", inexpensive cars in Russia, he explains.
"I think, in an optimistic scenario, 1 million Chinese cars a year in 10 years is quite an achievable milestone. In addition, it is worth considering that the departed brands may want to return and the arrival of Indian and Iranian car brands is possible," Vitaly Mankevich notes.
While the main problem is the low degree of localization, little is being done in Russia, for the most part everything is limited to assembly.
"The number of automotive components that are manufactured here is in the dozens, and these, to put it mildly, are not the most complex parts. Basically, these are plastic products for the interior and individual simple components. As far as I know, even AvtoVAZ is not fully provided with domestic components, although this problem is being solved urgently," Mankevich said.
At the beginning of 2023, China became the leader in the export of cars to Russia. In the first half of the year alone, manufacturers from China delivered 112 thousand cars to the Russian market, which is comparable to export figures for the whole of 2022, the Avtospeccenter Group of Companies told MASHNEWS.
However, even before Russia's car market was foreign
"60 brands operated on the Russian market until February 2022, but in fact the market has not been Russian for a long time. There were 4 real Russian brands, 12 Chinese brands and 44 brands from other countries," Alexey Podschekoldin, president of the Association "Russian Automobile Dealers" (ROAD), said at the session of the Eastern Economic Forum "Russian Automotive Industry in Search of a New Identity".
According to him, 45 brands eventually left our market (including Chinese manufacturers, but they left not for sanctions, but for economic reasons). The market has fallen. Now sales are slowly recovering. "The Chinese have arrived. And it's all just beginning, because there are 128 brands operating in China, of which more than 80 are Chinese. So far, only 20 brands are represented in Russia," Podschekoldin said.
The Chinese auto industry has reached its current volumes relatively recently. According to the ROAD, in the 1980s, no more than 500 thousand cars were produced annually in China. In the USSR at that time, 1.5 million cars were made per year.
Now China produces about 27 million cars, and in Russia 400 thousand cars are coming off the assembly lines annually.
"Today we have to admit that the market is not ours, foreign brands dominate there. But the same story was in China. Now 70% of the Chinese market is made up of local brands. And 30% is still joint production, the share of which is falling every year," Podschekoldin said.
We have totally revised our experience of technological cooperation with foreign partners," Zoya Kaika, Deputy General Director of PJSC Sollers, said at the WEF session.
Recently, the production of Sollers ST6 cars began at the former Mazda plant in Vladivostok, this is a joint project of the Russian company Sollers and the Chinese JAC. The car itself is very similar to the Chinese JAC T6. Sollers recognizes that there is no need to talk about a serious level of localization right now.
Now the market is favorable for new projects. According to ROAD estimates, 2 million cars are sold annually in Russia. Due to the departure of a number of brands, there is a shortage of new cars in the country. Under these conditions, the launch of a new production practically guarantees the manufacturer that there will be demand.
Source: https://mashnews.ru/million-kitajskix-mashin-v-god.-xorosho-li-eto-dlya-rossii.html