China’s Chery Assembles Cars in Russia at Vacated Western Factories

China’s Chery Assembles Cars in Russia at Vacated Western Factories

Chinese carmaker Chery has commenced assembling cars in Russia at three factories vacated by Western rivals in the aftermath of the Ukraine invasion. The move marks Chery’s extension of its reach to account for a larger share of Russia’s domestic production.

Chery’s Growing Market Share in Russia

Since Western carmakers withdrew from Russia, Chinese counterparts have captured over half of the market share in terms of sales. Chery now accounts for almost a fifth of Russia’s passenger car sales, and is supplementing its imports with semi-finished cars assembled in three Russian facilities.

Chery’s Strategy in Russia

Chery’s global expansion plans include entering over 60 new markets in the next three years. However, its actions in Russia are separate from its European expansion strategy. The company is keen to minimize publicity about its production in Russia to avoid scrutiny from the West.

Production at Former Western Facilities

In factories once owned by Volkswagen, Mercedes-Benz, and Nissan, Chery’s Tiggo SUV and Exeed models are rolling off the production line under the supervision of the plants’ new Russian owners. The Tiggo 7 is being rebranded as the Xcite X-Cross 7 at the St. Petersburg Automobile Plant acquired by the Russian state.

Assembly at Kaluga Plant

In Kaluga, AGR Automotive is assembling Chery’s Tiggo crossovers in small volumes. The plant has an annual capacity of 225,000 vehicles, and Chery is likely leveraging the idle capacity to meet Russian demand.

Increased Sales and Production Targets

Chery’s sales have experienced significant growth in Russia. Including its owned brands, Exceed and Omoda, the company almost quadrupled its new car sales in 2023 compared to 2022. The Kaluga plant, which has been idle for almost two years, has a production target of 27,000 cars this year.

Exeed VX Production at Esipovo

In the Moscow region, the Esipovo plant, acquired by car dealer Avtodom from Mercedes-Benz, is producing Chery’s Exeed VX. The plant has an annual capacity of 25,000 vehicles.

China’s Growing Influence in Russia

Chery’s assembly operations in Russia reflect China’s expanding influence in the country’s manufacturing landscape and economy since the invasion. It highlights Beijing’s support for Russia despite international sanctions.