Russia's Avtovaz Fears Chinese Auto Invasion as Sanctions Loom
The future of Chinese automotive exports to the stock market today hangs in the balance due to potential fresh sanctions from the West, causing trade to falter. Avtovaz, Russia's largest carmaker, worries about Chinese brands encroaching on its market segments, often undercutting prices. Meanwhile, Russia considers restricting Chinese imports and raising fees for imported vehicles.
Avtovaz's general director, Maxim Sokolov, has raised concerns about Chinese brands targeting Lada's traditional market segments. These brands offer discounts that negate the price advantage secured by the utilisation fee. The surge in Chinese finished vehicle exports to Russia, up 593% in 2023 compared to the previous year, has exacerbated these concerns.
Avtovaz officials have previously expressed worries about the rapid expansion of Chinese automakers in Russia. Asian companies, however, are hesitant to officially acknowledge their presence due to fears of secondary sanctions. In response, Sergey Chemezov, general director of Rosteс, announced that Russia will restrict Chinese vehicle imports.
The utilisation fee for imported finished vehicles may increase, hinted Albert Karimov, deputy Russian minister for Industry and Trade. Avtovaz's vice-president, Sergey Gromak, proposed a 'long-term indexation scale' for the fee to encourage Chinese automakers to localise in Russia. Chinese firms involved in localisation projects, like the restart of the Kaluga PSMA Rus plant with an unknown Chinese company to assemble Citroën C5 Aircross, tend to keep a low profile.
Under Russian law, all vehicle manufacturers and importers pay a utilisation fee. However, local OEMs have these costs compensated from the federal budget to boost their competitiveness.
The uncertain future of Chinese automotive exports to the stock market today, driven by potential sanctions and market encroachment, leaves Avtovaz and the Russian automotive industry in a state of flux. Russia's response, including potential import restrictions and fee increases, aims to protect local manufacturers while encouraging localisation. The outcome of these measures remains to be seen.
Read also:
- Xiaomi's YU7 SUV Challenges Tesla's Dominance with Impressive Pre-orders and Features
- Railway line in Bavaria threatened by unstable slope - extensive construction site at risk
- Wind Farm Controversy on the Boundary of Laois and Kilkenny
- Puerto Rico's Climate Lawfare Campaign experiences another setback with the dismissal of its deals.
