Potential Exodus of Approximately Ten Chinese Automobile Brands from Russia by 2025
Gearing Up for a Chinese Exodus from Russia's Auto Market?
It's rumored that some Chinese car brands might bid adieu to Russia by the end of 2025, according to reports by Kommersant. Brands like Oting, Kaiyi, SWM, Livan, VGV, Forthing, JMC, Ora, Skywell, Haima, and MG are predicted to exit the market due to financial inefficiency for dealers.
Why the Financial Struggle?
Lower demand, inflated dealer service costs, and bulky inventory levels are likely culprits behind these exits. Poor sales performance has left these Chinese developers floundering in the market.
In the opening quarter of 2025, a staggering 213 showrooms of Chinese brands shuttered their doors (a 3.2-fold increase year over year), while 124 opened (-2 times year over year). This year has witnessed a sharp contraction in the dealer networks of brands like Bestune (FAW) and Kaiyi, with 26 and 20 salons closed, respectively.
Russia, a Market Overflowing with Chinese Brands
The Russian Automobile Dealers Association (RоАD) flagged that the market was saturated with Chinese brands pouring in, surpassing its capacity. Consequently, the industry is confronting a steep sales decline.
Earlier, our website reported that the RоАD, representing the interests of over 1,300 dealerships nationwide, lobbied the Russian government to support the struggling industry. The association urged for the development of an industry program that offers subsidized loans for dealers and consumers alike, with interest rates below 10%. Failure to do so, they warned, could precipitate a market crisis.
Our website also reported that experts analyzed ads on the Auto.ru Evaluation classifieds and concluded that in March 2025, Chinese cars in Russia cost 9% more compared to the same time last year, while domestic cars escalated by 13%. On average, a Chinese car costs 3.74 million rubles, while a domestic model goes for 1.59 million rubles.
Now, let's delve a bit deeper into this situation. Interestingly, Chinese automobile brands saw a sizeable increase in market share in Russia following 2021, despite some brands exiting or closing dealerships. It's crucial to note that higher costs, investor losses, strategic pivots, and market saturation plagued these weaker Chinese brands. Meanwhile, stronger players like Chery, Geely, Changan, GAC, and Haval thrived and expanded their presence in the market.
Sources:1. Russian Market Watch2. Car Sales Base3. The Drive4. Reuters5. China Daily
- I'm not sure if the average cost of a Chinese car, which is currently 3.74 million rubles, will decrease due to the exit of some brands from the market.
- The unprofitability of dealerships for certain Chinese brands, such as Oting, Kaiyi, SWM, Livan, VGV, Forthing, JMC, Ora, Skywell, Haima, and MG, might be a reason for the rumored exits from Russia's auto market.
- Kommersant, a Russian finance and business newspaper, has reported that these exits could be due to factors like lower demand, inflated dealer service costs, and bulky inventory levels.
- Despite the predicted exits, the energy sector of the Russian auto industry may still experience some growth, as stronger Chinese brands like Chery, Geely, Changan, GAC, and Haval are reportedly thriving and expanding their presence in the market.
