Chinese manufacturer enters Russian car plants abandoned by Western companies – Reuters
10 October 2024 11:45
Chinese automaker Chery has started assembling cars in Russia at three plants previously owned by Volkswagen, Mercedes and Nissan. This was reported by Reuters, citing five people familiar with the situation, "Komersant Ukrainian" reports.
Chinese automakers have captured more than half of the Russian car market in terms of sales after most Western competitors left the country following Russia’s full-scale invasion of Ukraine in February 2022.
Chery, which accounts for almost a fifth of new passenger car sales in Russia, imports nearly finished cars and completes their assembly at three Russian plants. The company is likely counting on strong demand in the country, as the Russian domestic market is facing limited production and underutilisation of production capacity.
The plants, formerly owned by Volkswagen, Mercedes-Benz and Nissan, now produce the Chery Tiggo SUV and Exeed models under the supervision of the new Russian owners.
At the St. Petersburg Automobile Plant, which was sold by Nissan to the Russian state at the end of 2022, the Tiggo 7 model is being rebranded as the Xcite X-Cross 7. Xcite won the Best New Brand award at the SUV Awards in Russia at the end of September.
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In Kaluga, two hours south of Moscow, car dealer AGR Automotive assembles Chery Tiggo crossovers in small batches at a plant with an annual capacity of 225,000 vehicles.
In Esipovo, in the Moscow region, another plant produces the Chery Exeed VX, a mid-size luxury crossover.
Chery, together with the brands it owns such as Exeed and Omoda, almost quadrupled its new car sales to just over 200,000 units in Russia in 2023 compared to 2022. The company has already surpassed this figure in 2024.
Chery’s export strategy is known as “semi-assembled” (SKD): Tiggo models arrive at the Kaluga plant almost fully assembled. Chery pays the plant owners for the final assembly.
Russia raises duties on imported cars, potentially encouraging foreign automakers to localise production. Chery’s global expansion plans call for the company to enter more than 60 new markets over the next three years.
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