Chinese Automakers Outsell Russia’s Lada in Q1 of 2023

In the first quarter of 2023, Russians bought more Chinese automobiles than Ladas, the country’s most popular locally produced car. This demonstrates Beijing’s expanding influence in Russia’s economy as Western automakers flee the country.

The departure of Western automakers is narrowing Russian buyers’ alternatives, forcing them to accept higher prices as well as Chinese names such as Haval, Chery, and Geely.

According to figures released by the Association of European Businesses (AEB), new sales of passenger and light commercial vehicles in Russia plunged 44.7% in January-March to 153,477 vehicles (AEB). Sales in March 2023 were 10.6% lower year on year at 48,414 units. According to Reuters, 64,483 of the automobiles purchased in the first quarter were Chinese, while 64,240 were Ladas manufactured by Russia’s largest automaker, Avtovaz. Chinese brands and Russia’s Lada saw their market share increase by 40%.

Russia’s auto sector was heavily reliant on foreign investment, equipment, and parts, and it was seriously hurt by the aftermath of Western sanctions and the carmaker exodus in response to Moscow’s deployment of troops to Ukraine in February 2022.

New car sales in Russia fell by 59% in the year 2022. Since then, the Russian government has acquired assets from companies such as Renault, Nissan, and Toyota, for pennies on the dollar, literally.

Russian car production has fallen to its lowest level since the Soviet Union’s demise, and new vehicle prices have risen considerably, sapping demand at a time when Russian consumers are wary of big purchases. Russia is currently seeking investment and collaborations from “friendly” countries, meaning those that have not imposed sanctions, and is attempting to restart production at sites previously controlled by Western automakers.