Page 124 - RusRPTFeb23

High-profile Western auto manufacturers such as Renault left the market, making the industry one of the hardest hit from the fallout of the war. Other producers like BMW have kept a foot in the market. The German carmaker has halted the production of new cars at its Kaliningrad factory, but is still important parts and sticking to its service agreements. A final decision on exiting the market completely has not been made yet, according to the company.
In 2023 the share of Chinese brands on the Russian car market could double year on year and exceed 33%, according to the report by Otkritie Auto (auto business unit of Otkritie Bank), in line with previous reports by bne IntelliNews. In 2022, Chinese carmakers managed to increase their market share over twofold (from 7% to 18%) and gain maximum profits, the report stresses, noting that previously Chinese brands have been operating in the Russian market at a loss. As followed by bne IntelliNews, sanctions imposed on Moscow for its military invasion of Ukraine have brought the Russian car market screeching to a halt in 2022. Amid an exodus of Western and Japanese carmakers from Russia and plunging sales, Chinese carmakers are already reportedly hard-pressing Russian dealers into lowering their purchase prices and also eyeing the takeover of vacant assembly capacities. Confirming the previous reports that in 2022 Chinese carmakers were hard-pressing local dealers, Otkritie claims that last year Chinese suppliers decided not to drastically increase car exports to Russia, keeping the sales flat y/y and instead instructing the dealers to sell at prices which are 2-2.5 times higher than the Chinese market price. While all together the Chinese brands sold 123,500 cars in 2022 in Russia, which is roughly the same amount as in 2021, their market share, on the back of falling absolute sales figures, rose during the year from 7% to 18%.
124 RUSSIA Country Report February 2023 www.intellinews.com