Make Chinese cars in Russia, industry group urges manufacturers as import costs mount

‘In a few years, imported cars will become a rarity’ in Russia, says chairman of Russia-Asia Union of Industrialists and Entrepreneurs

Reading Time:3 minutes

China-made cars await export at a port in Jiangsu province. Photo: AFP

Published: 10:00pm, 23 Sep 2024

Chinese automakers should consider localising production in Russia – now the largest importer of Chinese cars – to capitalise on cost savings, a Russian industry organisation has urged.

Importing cars into Russia through container shipments by rail is becoming increasingly expensive due to rising customs duties and other fees, Vitaly Mankevich, chairman of the Russia-Asia Union of Industrialists and Entrepreneurs, told Sputnik News during the Eastern Economic Forum earlier this month.

“This is a very clear signal for market participants – in a few years, imported cars will become a rarity, and those who are genuinely interested in the Russian market should seriously consider localising production,” Mankevich was quoted as saying.

He added that Chinese car manufacturers are well-positioned to localise production in Russia because it significantly reduces production, logistics and customs expenses, as the costs of labour and resources, especially electricity, are much lower in Russia than in China.

Meanwhile, the tax increases have already forced some Chinese manufacturers to localise in Russia, which is grappling with the repercussions of sanctions and an exodus of Western brands following its invasion of Ukraine that began in February 2022.

“Russia is set to increase its vehicle-disposal tax on imported cars, forcing many Chinese businesses to localise,” said Tan Guoqi, president of the Sichuan-Chongqing Chamber of Commerce in Russia.