We’re hearing rumors at China Car Times central that Russian authorities are once again twisting the thumb screws down on our very own Chery and Geely auto makers.
Previously Russia effectively made it very difficult for Chinese automakers to operate in Russia over the past few months, and have been slowly forcing the Chinese out of their markets. The latest issue for Chinese makers in Russia, is the raising of the automobile standard by the Russian authorities, which is forcing Chery and Geely to leave the Russian market. The latest rules from the Russian authorities relate to the tax paid on CKD kits, and how CKD kits actually qualify as CKD kits, Russian authorities also believe the emission standards of Chinese cars are too low.
The Chinese motoring press say that Chery has already basically pulled out of Russia, Geely will do eventually and Great Wall has had nothing but problems with Russian bureaucracy.
Despite the eventual leaving of the Russian markets, Chinese manufacturers have already invested millions of dollars into the market and sold many thousands of cars in Russia. Who will loose the most from this deal, the Chinese manufacturers, or the Russian people?
is the Chinese market open to Russian cars?
With a 25% tax on the import of auto parts, Lada’s plans to assemble cars in China were hard pressed. Actually the Lada sold fairly well in Beijing some 25 years ago.
I never believed in protectionism even here in the US where I live. And in China also with regards to tax on foreign auto parts. Protectionism keeps weak and incompetant companies alive.
On a positive note I hope the high Russian standards force the Chinese automakers to improve their safety and emissions. So I could one day own and drive a Chinese made car in America:)
FYI Geely made a massive deal worth US$ 1.5 bln over several years with a Russian distributor (ROLF) at the end of last year. they’d be pissed to find that they are no longer welcome…
How accurate are these information ?
I don’t think this is protectionism, since Chinese cars only take a small share of the market,and there are many other makers in the russian market like American, European and Japanese. I don’t see why they pick on the Chinese. Well tbh, if they really want to look into standards,safety, emission…etc.. issues, I’d say Lada is a good starting point.
I don’t know if this news is a rumour or not.
But this is something else i got
http://www.just-auto.com/article.aspx?id=93937
and this
Chinese automaker Chery to organize full-scale production in Russia
China’s Chery Automobile plans to build a plant in the Russian Republic of Udmurtia, in the Volga region, to produce cars, engines, gearboxes, drive gear, and axles.
Chery President Yin Tongyao and Alexander Volkov, president of Udmurtia, discussed the possibility yesterday.
The Chery management is holding meetings with regional authorities and potential partners, according to the company’s representative in Russia.
Dmitry Rumyantsev of SOK Group, which owns the IzhAvto plant in Udmurtia, said no agreements had yet been reached, and that the plant was considering different options for increasing production, one of them being cooperation with Chery.
IzhAvto’s annual capacity is 200,000 automobiles, but this year’s plan stipulates production of only 71,000, Rumyantsev said.
Sergei Sanakoyev, head of the Russian-Chinese center for trade and economic cooperation, said Chery had long been looking for new cooperation opportunities in Russia. In his opinion, it has been disappointed by the joint project with Avtotor in the Kaliningrad Region, Russia’s exclave on the Baltic Sea, because it was not granted the promised privileges for the import of auto components.
Ruslan Sadykov, head of Avtotor-UV, said his company produced 42,000 Chery cars in 2007 and has signed a cooperation contract for 2008, adding that production would grow. In his opinion, IzhAvto is one of the options the Chinese are considering.
Yevgeny Bogdanov, an auto analyst at A.T. Kearney, a global strategic management consulting firm, said Russia’s Economic Development and Trade Ministry had stopped accepting requests for organizing foreign car assembly plants under privileged conditions last year.
He said Chery should not start the project in Utmurtia because its investments would not be recouped without privileges. Chery would spend too much on the delivery of auto components to Izhevsk, he said. Besides, labor is so cheap in China that it would be ineffective to assemble Chinese cars in Russia.
Moreover, IzhAvto assembles KIA cars, and the South Korean partner is unlikely to be happy to have a rival in such close proximity, the analyst said.
Mikhail Kontserev, head of the St. Petersburg-based Olimp dealership, which last year opened a Chery salon, said Chinese producers are scrutinizing the Russian market where cheap Chinese cars enjoy high demand.
He said Chery would have sold many more cars in Russia if not for limited production facilities and delivery problems. A full-scale plant would solve all of these problems, Kontserev said.