Otkritie Auto Calls for Localized Production by Automakers in Russia

Monday, 23 September 2024, 14:00

Otkritie Auto urges automakers, particularly Chinese brands, to localize production in Russia due to rising costs and increasing vehicle-disposal taxes. As Russia emerges as China's largest overseas auto market, the industry faces challenges from sanctions and the need for cost-effective solutions. Localizing production could offset logistic expenses and enable manufacturers to thrive in this shifting market landscape.
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Otkritie Auto Calls for Localized Production by Automakers in Russia

Localizing Production: A Strategic Move for Automakers

Otkritie Auto is advocating for automakers to establish manufacturing in Russia as rising costs make conventional importing vehicles increasingly burdensome. According to Vitaly Mankevich, the chairman of the Russia-Asia Union of Industrialists and Entrepreneurs, those interested in the Russian market need to seriously consider localizing production.

Financial Implications of Rising Costs

This shift is prompted by substantial tax increases on imported vehicles, which will progress significantly through 2030. Mankevich stated that this serves as a clear warning for market participants as imported vehicles become scarce.

  • Russia is now China's largest overseas auto market, accounting for over 19% of China's auto exports.
  • The vehicle-disposal tax on imported cars could rise between 10% to 20% each year starting next year.

Chinese Automakers’ Position in Russia

Chinese automakers like Haval, Chery, and Geely have gained remarkable traction in the Russian auto sector following the exit of major Western brands precipitated by the Ukraine conflict.

  1. In the first eight months of 2024, Chinese companies exported passenger cars worth $9.15 billion to Russia.
  2. Car exports from China exceeded 730,000 units in 2023, with strong growth projected for 2024.

As the landscape evolves, it remains crucial for automakers to adapt and reassess their strategies.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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