Russians reluctantly embrace Chinese cars after Western brands depart

Record ID: 1717210

  • Title: Russians reluctantly embrace Chinese cars after Western brands depart
  • Date: 24th March 2023
  • Summary: MOSCOW, RUSSIA (MARCH 23, 2023) (REUTERS) VARIOUS OF GEELY LOGO VARIOUS OF GEELY CARS VLADIVOSTOK, RUSSIA (MARCH 22, 2023) (REUTERS) VARIOUS OF GEELY CAR WITH RED RIBBON (SOUNDBITE) (Russian) CEO OF “ALTAIR AUTO”, VLADIMIR SHESTAK, SAYING: “There's multiple growth in the sale of Chinese cars now. Both among already established brands and the new ones. There are a lot of companies now entering the Russian market. Some behave braver, some - more delicate. We’ve lived our lives focusing on European, American, Japanese car brands, disregarding the Chinese market completely, which, hidden from our view, has been developing very rapidly. And now Chinese car makers can offer such a variety of cars. From a technical point of view they are even more advanced than French cars. In some areas even more advanced than Japanese.” GEELY CAR ON DISPLAY (SOUNDBITE) (Russian) CEO OF “ALTAIR AUTO”, VLADIMIR SHESTAK, SAYING: “In light of all the recent events we mostly rely on Geely sales now. But we continue to sell Mercedes cars. Some of them are brought via parallel import, some are leftover stock from before.” CARS ON DISPLAY (SOUNDBITE) (Russian) CEO OF “ALTAIR AUTO”, VLADIMIR SHESTAK, SAYING: “The demand (for Geely) is much higher than Mercedes because the cars are more affordable. We think that by the end of the year we will sale around 250-300 cars which is pretty respectable for this car segment, specially in current conditions.” VARIOUS OF HAVAL CARS HAVAL LOGO VARIOUS OF WOMAN SITTING IN HAVAL CAR HAVAL LOGO (SOUNDBITE) (Russian) HAVAL SALES MANAGER, SVETLANA TROFIMOVA, SAYING: “When we just started selling Chinese cars in the Russian Far East, clients had fears of buying them. For the whole of this year we have been working with our customers: organize test drives, giving more information about our cars.” WOMAN LEAVING HAVAL CAR (SOUNDBITE) (Russian) HAVAL SALES MANAGER, SVETLANA TROFIMOVA, SAYING: “Our cars are made in Tula region (of Russia). There is a full scale plant there. We don’t have problems with customs, that’s why all the production range is available.” MOSCOW, RUSSIA (MARCH 23, 2023) (REUTERS) VARIOUS OF GEELY CARS OUTSIDE DEALERSHIP VARIOUS OF GEELY CARS IN SHOWROOM VARIOUS MAN IN MASK TRYING OUT CAR CAR PRICE LIST (SOUNDBITE) (Russian) MOSCOW RESIDENT, MITSUBISHI OWNER, ALEXANDER, 74, SAYING: “I’m here in this dealership because I hope that the Chinese made good progress in car making. Besides, I hope that I won’t have problems with delivery of spare parts, if I need them. Especially because some (Chinese) cars are made in Russia now. As for reliability, I believe that in time the reliability will improve. For example, I know that (Geely) Tugella has a Volvo engine. This sold this car for me.” VARIOUS OF INTERIOR OF GEELY CAR VARIOUS OF GEELY CARS IN SHOWROOM (SOUNDBITE) (Russian) MOSCOW RESIDENT, SKODA OWNER, ALEXANDER VORONKOV, 74, SAYING: “I’m pretty old, so I hope my Skoda will last the remaining time. But if I do need to buy a new car, I will probably have to (pick a Chinese)… There is no alternative.” VARIOUS OF MAN SITTING NEXT TO GEELY CAR (SOUNDBITE) (Russian) MOSCOW RESIDENT, SKODA OWNER, STEPAN, 28, SAYING: “I use Chinese cars more and more often because European ones were removed from (carsharing service) Yandex Drive. All car sharing services now are changing cars to Chinese, so I come across them often. I do have complaints. They have to do with the smoothness of ride, assembly quality and day to day use. I managed to buy a Skoda in 2022 (just before the sanctions). If you want my honest opinion, the difference (with Chinese cars) is massive.” EXEED CARS ON DISPLAY MAN TRYING OUT EXEED CAR VARIOUS OF EXEED CAR INTERIOR MAN SITTING IN EXEED CAR, SAYING “GOOD CAR BUT TOO EXPENSIVE” MAN TRYING GEAR SHIFT HANDLE MAN SITTING IN EXEED CAR, SAYING “FEELS LIKE LADA” MAN LEAVING CAR (SOUNDBITE) (Russian) MOSCOW RESIDENT, VOLVO OWNER, MAXIM, 28, SAYING: “I have a 2012 Volvo XC-70. Now I came here to check Chinese cars. I consider buying one. Just getting to know these cars, I have never come across them before. But now I have problems with (Volvo) spare parts. Everything is becoming expensive. So I started eyeing the Chinese.” MAXIM KNOCKING ON DASHBOARD (SOUNDBITE) (Russian) MOSCOW RESIDENT, VOLVO OWNER, MAXIM, 28, SAYING: “The price of 5-6 mln roubles is too much for this car for example. Look at the plastic they used. Looks really cheapskate.” MOSCOW, RUSSIA (MARCH 22, 2023) (REUTERS) VARIOUS OF CHINESE CARS IN MOSCOW TRAFFIC PEOPLE LEAVING GEELY TAXI MOSCOW, RUSSIA (MARCH 23, 2023) (REUTERS) (SOUNDBITE) (Russian) JOURNALIST, AUTO INDUSTRY EXPERT, SERGEY ASLANYAN, SAYING: “Chinese brands in Russia have two very serious flaws. They don’t have a reputation which leads to the fact that there’s no trust in them. Yes, they almost don’t have any competitors here anymore and they feel that they can arrogantly and quickly fill this void. But that does not mean that people can change their opinion quickly.” WHITE FLASH (SOUNDBITE) (Russian) JOURNALIST, AUTO INDUSTRY EXPERT, SERGEY ASLANYAN, SAYING: “If a person in Russia wants to put somebody down, he will say that “Hey, you have a Chinese phone or your car is Chinese.” At the moment people are not that hungry (for cars) to show real demand for Chinese products. We need to end up like Cuba first - to turn into pedestrians over the years - and then maybe we will lower the expectations enough for Chinese cars.” MOSCOW, RUSSIA (MARCH 22, 2023) (REUTERS) VARIOUS OF CHINESE CARS IN MOSCOW TRAFFIC MOSCOW, RUSSIA (MARCH 23, 2023) (REUTERS) (SOUNDBITE) (Russian) EDITOR-IN-CHIEF OF “ZA RULEM” (TRANSLATES: BEHIND THE WHEEL) MAGAZINE, MAXIM KADAKOV SAYING: “When the spring of last year happened (the Russian operation in Ukraine started), everybody was saying that China would flood us with their cheap cars. Back then I kept insisting that on a high risk market like the Russian market nowadays, everyone would want to earn here and now on each sold unit. I kept trying to explain to everybody that the Chinese would not flood us with cheap cars. And that’s exactly what happened. They bring a lot of cars but if we talk about price, not quality, there are no cheap cars at all.” WHITE FLASH (SOUNDBITE) (Russian) EDITOR-IN-CHIEF OF “ZA RULEM” MAGAZINE, MAXIM KADAKOV, SAYING: “I’m not saying that everybody is ready to buy a Chinese car. Of course not. But we see a shift towards acceptance of the idea that a Chinese car can be bought. There is a clear trend for it. If 10 years ago, 2 or 3 percent of people were ready to buy a Chinese car while 95 percent replied that they would never do so, now - even back in 2021 the share of Chinese cars on the Russian market was 6,8 percent. So the trend was visible even back in 2021 - almost 7 percent of people were buying Chinese cars, while 90 or 85 percent said never. Another year passed, and the Chinese share rose to 20 percent. So 20 percent of customers buy Chinese cars, while 70 or 60 percent say never. So there is a shift. People at least start to say that someday they might have a think of buying a Chinese car.” WHITE FLASH (SOUNDBITE) (Russian) EDITOR-IN-CHIEF OF “ZA RULEM” MAGAZINE, MAXIM KADAKOV, SAYING: “It is obvious and I think that by the end of 2023 Chinese car makers will occupy at least 40% of the new cars market in Russia. And I’m talking about only the official supplies. Another 40% will be occupied by AvtoVAZ which plans to make 40 thousand of LADAs. 20% is all the rest - alternative import of BMWs, Mercedes from various markets and alternative import from China by dealers and private buyers and so on.” WHITE FLASH (SOUNDBITE) (Russian) EDITOR-IN-CHIEF OF “ZA RULEM” MAGAZINE, MAXIM KADAKOV, SAYING: “It is assumed that there will be customers, who without having access to new BMW, Audi, Mercedes with manufacturer’s warranty will opt for Chinese cars. Not all of them. Some will still order Mercedes and BMW from Europe via various detours and complex deliveries, via Armenia, UAE, Turkey et cetera. But some will settle for Chinese.” VLADIVOSTOK, RUSSIA (MARCH 22, 2023) (REUTERS) VARIOUS OF VLADIVOSTOK TRAFFIC
  • Embargoed: 7th April 2023 14:34
  • Keywords: AUTO CARS CHINA GEELY HAVAL RUSSIA SANCTIONS
  • Location: MOSCOW, RUSSIA / VLADIVOSTOK, RUSSIA
  • City: MOSCOW, RUSSIA / VLADIVOSTOK, RUSSIA
  • Country: Russia
  • Topics: Europe,Government/Politics,International Trade
  • Reuters ID: LVA001940222032023RP1
  • Aspect Ratio: 16:9
  • Story Text: As the exodus of Western carmakers narrows options for Russian consumers, Chinese automakers are filling the gap, forcing Russians to overcome their reluctance to embrace Chinese brands and stomach higher prices. 
    Chinese brands such as Haval, Chery and Geely now account for almost 40% of Russia's new car sales, data from analytical agency Autostat and consulting company PPK showed, up from less than 10% in January-February of 2022, pouncing on the opportunity left by the exit of firms such as Renault Nissan and Mercedes.
    But there are teething problems. Reuters spoke to several Russian car buyers - individuals and dealerships - who perceived the quality of some Chinese cars to be lower than Western rivals and industry experts said Chinese manufacturers needed to enhance their reputation even as their market share soars.
    Stepan, 28, who has increasingly driven Chinese cars when using carsharing services, is among those that need convincing. Among his complaints was the smoothness of the drive.
    "I managed to buy a Skoda in 2022. If you want my honest opinion, the difference (with Chinese cars) is massive," he told Reuters at Moscow's Favorit Motors dealership.
    Czech carmaker Skoda Auto, part of Volkswagen Group and one of several Western automakers that had local car production, is in the final stages of a deal to sell its Russian assets in the wake of Western sanctions after Moscow despatched troops to Ukraine last February.
    When buying his new Chinese car, Alexander, 74, looked for one which encompassed Swedish technology.
    "I believe that in time the reliability will improve," he said. "For example, I know that (Geely) Tugella has a Volvo engine. This sold this car for me."    
    Russia's former president Dmitry Medvedev said on Friday after a visit to China in December that cooperation with Chinese manufacturers was good and consumers' perceptions were out of date. 
    "We used to laugh at some of their designs, but I went for a ride in a local car and looked at others," he said. "I'll say bluntly: the car I drove was certainly no worse than a Mercedes." 
    Most Western automakers, who have fought with domestic carmakers for market share since they began building factories in Russia in the early 2000s, ceased operations last February. 
    "We've lived our whole lives focused on European, Japanese, American brands and did not especially take the Chinese market into account, which...has developed at an incredible rate," said Vladimir Shestak, general director of Altair-Auto in Vladivostok, whose dealership specialises in the Mercedes-Benz and Geely brands.
    Though the majority of foreign firms have exited Russia or are in the process of leaving, lingering stocks and parallel imports mean some companies' cars remain on sale for now.
    Renault, through its former controlling stake in Russian carmaker Avtovaz, and South Korea's Kia Corp had the highest market share before Russia began what it calls a "special military operation" in Ukraine. 
    While Chinese cars are increasingly filling the gap, the lack of reputation remains an issue, said auto industry expert Sergey Aslanyan. 
    "Yes, they have almost no competitors here anymore," he said. "But that does not mean that people will change their opinion quickly."   
    Chinese brands' market share reached 37.15% in January-February, up from 9.48% a year earlier, Autostat and PPK data showed. Sales of departing European, Japanese and Korean brands were down to 22.6% from 70%. 
    The sharp swing comes, however, amid plummeting sales of new cars, which slumped 58.8% in 2022 as lower living standards and a desire for Western-made vehicles caused people to reduce their spending and purchase more used cars.
    In a sign of growing cooperation China's Haval is now producing cars locally, while in Moscow, the revived Soviet-era Moskvich is using engine parts, design and engineering from China's JAC.
    * This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine.
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