As a steely fighting people, Russians have surprisingly many tender superstitions or fantasies about small cars.
For example, they have a separate pet name for their car. It is said that this habit is to name the horse, the general use of more alternative names are “swallow”, in Russian culture it is a symbol of love, good life;
After buying a new car, Russians will also drop a few drops of champagne on the car for the first car wash; Russian license plates are made up of 3 numbers and 3 characters, the Chinese like 6, Russians think it is unlucky, they like 1, 3, 7.
Russians believe that bird droppings in the front window bring good fortune, but in the trunk means loss. In addition, Russians must not say “to change a new car” in the car, they think that the old car will be sad to hear.
So car crazy Russians, after suffering Western sanctions in the war between Russia and Ukraine, life is said to have not changed much, but Western car companies have left Russia, Russians who want to buy a car have fewer choices.
Last year, with the ruble exchange rate once strong, Russians once burst to buy their favorite Japanese used cars, easy to break and cheap; This year, in the new car market, cars from China, along with rapid sales growth, have greatly increased their market share.
Russian authoritative media reported that in January 2022, the share of Chinese cars in the Russian market was 9%, and by the end of December, it had increased to 37%. In the first six months of 2023, Chinese car brands sold 168,000 units in the Russian market, four times the same period last year, more than the annual sales in 2022, and the market share further climbed to 46%, and Chinese car companies accounted for six seats in the top ten new car sales.
In the view of Western car companies, Chinese cars have seized the empty market after their retreat; In the eyes of some Russians, Chinese cars, once looked down upon, have become unaffordable.
First, the Russian car market used to favor cars produced in Russia, Europe and South Korea
The number of cars in Russia in 2022 is 53.5 million, ranking fourth in the world after China (302 million), the United States (283 million) and Japan (79.1 million).
In the new car market, 1.66 million units were sold in 2021, just before the Russia-Ukraine war, ranking second in Europe after Germany (2.87 million units in 2022), the United Kingdom (1.89 million units in 2022), and France (1.87 million units in 2022). In 2022, new car sales in Russia fell to 680,000 units, which was greatly affected by the war sanctions and the withdrawal of foreign investment, so the 2022 data is not very useful to judge the potential of this market.
Specific to the sales structure of the car market, foreign automobile companies in Russia’s sales market accounted for more than 60%, and Russian local automobile companies in Russia’s sales market accounted for about 30%. The biggest seller of local brands is Lada (founded in the 1960s). Volkswagen, Kia, Hyundai, and Renault were the top sellers in foreign markets (the rankings vary depending on the year).
A not bad potential market, with the sound of a gun on February 24, 2022, Russia’s automotive industry has undergone a sudden change. More than 15 multinational automobile companies have withdrawn from Russia.
First Renault (in May last year), followed by Japan’s Toyota, announced the end of production operations in St. Petersburg, Russia, on September 23 last year. Immediately after the largest cumulative investment in Russia, more than 200 billion rubles, Volkswagen also took the action of selling shares and factories to local dealers. South Korea’s Hyundai Motor has put its Russian plant up for sale.
In 2021, 300,000 people are employed by Russian car manufacturers, and 3.5 million people are employed in upstream and downstream related industries. Russia’s total employed population is 72.3 million. The auto industry accounts for nearly 5 percent of total employment.
A day when the auto industry shuts down means workers may lose their jobs. Ensuring employment means ensuring stability. This is the local people’s persistence.
As a result, the Russian car market has a blank window.
Second, Russian auto companies to save themselves, behind the surprise of Chinese auto companies
Last November, when production of the Moskvich began again after 20 years out of production, Moscow Mayor Anatoly Sobyanin was thrilled, calling it a historic revival of the brand. Reuters also reported that “Muscovites are coming back to life!”
The Muscovite Automobile Factory was founded in the Soviet era (1930) and occupied the leading position of the former Soviet automobile industry in the 1970s and 1980s. It used to be one of the Russian favorites.
But the love is the deepest and the fall is the worst. After the collapse of the Soviet Union in 1991, Muscovite was first privatised and then bankrupt, before being acquired in 2007 by Avtoframos, a joint venture between Renault and the city of Moscow.
Why did Moscow suddenly think of reviving a 20-year-old brand? One of the backgrounds is believed to be that in the current retreat of foreign car companies, the re-employment of workers in car insurance companies has become a top priority.
In charge of producing the Muscovite, it is the legacy left by Renault, which “ran away” ahead of schedule in May last year.
Renault announced its withdrawal from the Russian market in May last year. It left two legacies.
First, it sold its 68% stake in AvtoVAZ (Russia’s largest automaker, founded in 1962) to NAMI, Russia’s national automotive engineering institute, for a symbolic 1 ruble (NAMI has developed luxury cars for successive Russian leaders, including current President Vladimir Putin). But its plant is much smaller than the Avtovaz plant.)
The other is the factory he left behind in Moscow. When it was decided to use the plant to repopulate Muscovites, the mayor of Moscow, Sergei Sobyanin, declared on his blog: “In 2022, we will open a new page in the history of Muscovites.”
But bold words were quickly hit in the face. “Russia has invented a time machine that allows the country to travel through time, but only back to the Soviet Union.”
Later, the public outcry was even greater, because people found that the Moscow people who were given the task of rejuvenation and the first car produced after the resumption of production was not a domestic model, but from the far east – the JAC JS4 after the change of the label.
Because the Russian auto industry does not have the ability to produce and research itself, the international supply chain that relies heavily on has been sanctioned after the outbreak of the Russian-Ukrainian conflict, which has made the Russian auto industry, which is not rich, worse.
After the Renault plant was acquired, the Russian government handed it over to Kamaz (Karma Auto Works), a car company that produces heavy trucks. The responsibility of reviving the national car brand was too heavy for it, because Kamaz did not know how to produce passenger cars that fit today’s era.
There is only one way for it to look for cooperation with car companies that can produce passenger cars. At this time, the Western counterparts all ran away, and only the Eastern partners stayed.
Kamath thought of its old buddy, JAC Motors, which had collaborated on truck development. There is no more suitable companion.
According to media reports, the first model of the Muscovite after the resumption of production, the Moskvich 3, is a small SUV, offering fuel and pure electric versions. But according to Reuters news, the design, engineering and platform of the model are from JAC JS4, and even the parts code on the show car also carries the JAC label.
In addition to Jianghuai Automobile invited to cooperate, in the recent period of time, other Chinese car companies have also become guests of Russia.
Russian auto market analysis agency Autostat data show that in August 2023, Russia’s new car sales were 109,700 units, and the top 5 sales were Lada (Russia’s own car brand) 28,700 units, Chery 13,400 units, Haver 10,900 units, Geely 8,300 units, Changan 6,800 units.
Another data shows that in the past year, 487 new Chinese car brand dealer stores in Russia, and at present, one out of every three car dealers sells Chinese cars.
Post time: Oct-10-2023