From Chevy to Chery for Russian car buyers
As established automakers leave Russia, Chinese companies are filling the void.
If Russia has a future, some commentators have said, it's serving as a resource colony for China. (That's probably the optimistic scenario for the world’s largest country. The pessimistic scenario sees Russia losing its status as the world’s largest country, as significant parts of it become Greater Heilongjiang or Outer Inner Mongolia.)
At the moment, we can add "car showroom for China" in the mix. With Western brands leaving, Chinese companies are filling the void, much to the chagrin of Russian auto enthusiasts.
As the exodus of Western carmakers narrows options for Russian consumers, Chinese automakers are filling the gap, forcing Russians to overcome their reluctance to embrace Chinese brands and stomach higher prices.
Chinese brands such as Haval (601633.SS), Chery and Geely (0175.HK) now account for almost 40% of Russia's new car sales, data from analytical agency Autostat and consulting company PPK showed, up from less than 10% in January-February of 2022, pouncing on the opportunity left by the exit of firms such as Renault (RENA.PA), Nissan (7201.T) and Mercedes (MBGn.DE).
But there are teething problems. Reuters spoke to several Russian car buyers - individuals and dealerships - who perceived the quality of some Chinese cars to be lower than Western rivals and industry experts said Chinese manufacturers needed to enhance their reputation even as their market share soars.
Stepan, 28, who has increasingly driven Chinese cars when using carsharing services, is among those that need convincing. Among his complaints was the smoothness of the drive.
[…]
Though the majority of foreign firms have exited Russia or are in the process of leaving, lingering stocks and parallel imports mean some companies' cars remain on sale for now.
Domestic producer Avtovaz's Lada brand is Russia's most popular. Renault, through its former controlling stake in Avtovaz, had the highest market share among foreign producers before Russia began what it calls its "special military operation" in Ukraine.
While Chinese cars are increasingly filling the gap, the lack of reputation remains an issue, said auto industry expert Sergey Aslanyan.
"Yes, they have almost no competitors here anymore," he said. "But that does not mean that people will change their opinion quickly."
There’s a website called China Car History, on which I like to spend time in lieu of working, which reviews the country's long and mostly undistinguished history of building automobiles. Depending on who was occupying China at the time, this usually involved license-built copies of Western or Japanese models, and truly weird homegrown designs under Mao.
Decades of joint ventures (and blatant piracy) have brought the industry a long way, and many homegrown Chinese models actually look pretty good in the metal and on paper. Many are being sold in Europe, Britain and Australia, and sales in Canada and the United States are just around the corner.
And always will be.
Keep reading with a 7-day free trial
Subscribe to Rigid Thinking to keep reading this post and get 7 days of free access to the full post archives.