Chinese Automakers Face Harsh Reality in Russia

What looked like a goldmine in 2023 has turned into a closed market by the end of 2024. After the invasion of Ukraine, Western brands exited Russia and Chinese automakers quickly filled the empty showrooms. But the new reality is far different — Moscow has imposed a “recycling fee” that raised the price of basic models by more than $8,000, while sky-high interest rates make it nearly impossible for Russian buyers to secure loans.

The result? Car sales in Russia have dropped 27% in just six months, and imports of Chinese vehicles have plunged 62%.

Chinese Brands Lose Ground

The damage is significant:

Geely reported an 8% decline in exports between January and August.

Great Wall Motor barely broke even.

Chery, China’s biggest exporter, grew only 11% compared to last year’s 25%.

The growth momentum has stalled.

Meanwhile, BYD, which has no official presence in Russia, more than doubled its overseas sales — proving how aggressively Chinese giants are chasing new markets while Russia sinks deeper into economic turmoil.

But the problem runs deeper. Chinese automakers face excess capacity at home and a brutal price war. The collapse of the Russian outlet adds pressure, while more countries impose tariffs to shield their domestic industries. The harder China pushes abroad, the more doors begin to close.

Geopolitical Tensions: Trump, BRICS, and Tariffs

Global politics are adding fuel to the crisis:

Donald Trump told reporters that European leaders will fly to Washington this week to discuss ending the war in Ukraine. He admitted he is “not satisfied” with the current situation but repeated that the conflict “will be settled soon.”

At the same time, Brazilian Prime Minister Lula da Silva is preparing a virtual BRICS summit. Chinese President Russian President Vladimir Putin are expected to attend, with Trump’s trade threats dominating the agenda.

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