Russia is Now China’s #1 Export Destination

With a strong export momentum since the beginning of the year, Chinese-made cars continue to gain a wider and firmer foothold in Russia. During the first 5 months of the calendar year, Russia has become China’s top export destination with export volume reaching 287,000 units, followed by Mexico with 159,000 units and Belgium with 120,000 units, according to the China Association of Automobile Manufacturers (CAAM).

Among the total exports over the period, new-energy vehicles (NEVs) saw exports of 673,000 units, up 1.2 times. Belgium, the UK, and Thailand are the top three destinations for China’s NEVs, which consist of plug-in hybrid (PHEV), battery-electric (EV), and range-extender (EREV) vehicles.

According to CAAM data, Chinese auto exports in June stood at 382,000 units, up 53.2% on a yearly basis. In the first half of the year, auto exports reached 2.14 million units, a jump of 75.7 percent from a year ago. Bear in mind China already surpassed Japan to become the world’s largest vehicle exporter as of Q1, 2023. Xu Haidong, a deputy general engineer of CAAM, said that China-made vehicles have become more competitive in the global market, benefitting from strict quality control, a sophisticated industrial chain, and comprehensive maintenance services.

Talking specifically about the surge in exports to Russia, Cui Dongshu, secretary general of the China Passenger Car Association (CPCA), told the Global Times:

“The retreat of Western auto brands from the Russian market has left a niche for Chinese players to fill in. Coupled with the enhanced competitiveness of Chinese cars, Russia has witnessed more Chinese autos being shipped there.”

Sales of Chinese cars in Russia are expected to reach up to 400,000 by the end of 2023, the Xinhua News Agency reported, citing estimates of experts at Otkritie Auto, the auto business unit of Russia’s Otkritie Bank. Chinese automakers now have nearly 1,500 dealerships in Russia, accounting for 46% of Russia’s total, according to estimates released by Otkritie Auto. The most popular Chinese auto brands in Russia are Chery, Haval, and Geely.

In comparison to the steady recovery of the local auto market, China’s auto exports have maintained strong momentum throughout the year. According to the CPCA data, China’s passenger vehicle sales climbed month over month from February to June, which hasn’t happened in the previous 20 years.

Retail car sales stood at 1.9 million units in June, up 8.7% from May. Yet sales fell 2.6% last month on a yearly basis due to the high comparison base in June last year. Cui predicted that this month will see a big increase in China’s exports of vehicles due to the yuan’s favorable exchange rate on the international currency market.

According to a statement made by China’s Ministry of Commerce, the country would take more steps to promote the export of vehicles. Among these include encouraging automakers to work with both local and foreign financial institutions to provide financing solutions and further improve the quality of the vehicles.