China refuses to replace Russia’s European auto industry

Chinese automakers refuse to fully replace the European, American and Japanese companies that left Russia. Imports of cars from China to Russia continue to fall, while supplies of auto parts remain at relatively low levels, while Chinese companies are increasing imports to Europe. This is reported by Kommersant with reference to the Chinese customs data.

The main reason is the total collapse of demand in the Russian market against the backdrop of the war in Ukraine, sanctions, problems with logistics and falling incomes of Russians. Moreover, analysts are confident that Chinese companies will not seek to increase supplies and occupy the niches of other automakers, as they are not sure about the recovery of demand, and also because of the uncertainty of the policy of the Russian authorities regarding the auto industry.

In monetary terms, imports of cars from China to Russia fell to almost $32 million in May against $84.6 million in April and $190.7 million in March. The import of automotive parts, on the other hand, shows mixed dynamics: in February, it was estimated at $117.1 million, after which it collapsed to $76.3 million in March, and by May it grew slightly and reached $81.3 million. The publication notes that a significant part of the components in China is bought by Russian automakers: AvtoVAZ, KamAZ, GAZ and UAZ.

Falling demand is not the only problem for Chinese automakers. The war in Ukraine undermined established supply chains, which affected the costs of companies looking for alternatives. The search for new supply routes affected the price of new cars and spare parts, which in turn further hit demand within Russia. The collapse in demand and purchasing power of the Russians themselves reduces the prestige and interest of the Chinese auto industry in the Russian market in principle.

At the moment, the Chinese car market is also suffering from a drop in sales, but these problems do not convince concerns to increase supplies to Russia, China's auto giants choose in favor of Europe. For example, deliveries of electric cars in May doubled compared to the same month last year.

Serious problems in the Russian auto industry were recognized even by Russian President Vladimir Putin, according to him, in April, the volume of production in Russia fell five times and this happened due to the departure of foreign partners. Sales of new cars in April fell by 78.5%.

American Daily Newspaper

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